REG - Evraz Plc - CORRECTION_EVRAZ Q1 2015 Production Report <Origin Href="QuoteRef">EVRE.L</Origin>

EvrazAnnouncement

15/07/2015 13:39

RNS Number : 6840K
Evraz Plc
20 April 2015
This announcement replaces the RNS announcement number 6680K released at 07:00 today, 20April 2015.
The figures in the table "Average selling prices, Q12015" in the STEEL - Russia section should read as follows: 
Average selling prices
USD/tonne (ex works)
Q1 2015
Coke
85
Pig iron
206
Steel products

Semi-finished products
303
Construction products
418
Railway products
512
Other steel products
421
The figures in the last line of the table COAL - Coking coal should read as follows: 
Product, '000 tonnes 
Q1 2015
Q4 2014
Q1 2015/
Q4 2014, change
Q12014
Q12015/ Q12014, change
Coking coal concentrate (production)
3,407
3,770
-9.6%
3,285
3.7%
The figures in the table "Average selling prices, Q12015", COAL - Coking coal should read as follows: 
Average selling prices
USD/tonne (ex works) 
Q1 2015
Raw coking coal
31
Coking coal concentrate 
56
EVRAZ Q12015 PRODUCTION REPORT 
20April 2015-EVRAZ plc (LSE: EVR) today releases its operational results for the first quarter of 2015.
Q12015 vs Q42014 OPERATIONAL HIGHLIGHTS:
 Consolidated crude steel output was stable at 3.9 million tonnes per quarter with Russian steel mills running at full capacity
 Production of steel products, net of re-rolled volumes, was unchanged at 3.7million: 
o 5% higher production of semi-finished products for export supported by EVRAZ's low cost position and devaluation of the Russian rouble and Ukrainian hryvnia, and a 7% growth in production of railway products in Russia and North America due to increased orders from EVRAZ's key customers
o the decline in production volumes for other steel products caused by the lower demand and increased competition for construction products in Russia and for flat-rolled products in North America 
 The share of finished steel products within consolidated volumes went down to 61% in Q12015 from 63% in Q42014 due to increasing output of semi-finished products for exports primarily as a result of a weaker demand for construction products in the Russian market
 Consolidated raw coking coal output and production of coking coal concentrate decreased by 9%and 10% respectively due to lower output of the Raspadskaya coal company primarily as a result of a planned longwall move at one of its mines
STEEL
Product, '000 tonnes 
Q1 2015
Q4 2014
Q1 2015/
Q4 2014, change
Q1
2014***
Q12015/ Q12014, change
Coke (saleable)
285
304
-6.2%
255
11.5%
Pig iron
3,131
3,143
-0.4%
2,991
4.7%
Pig iron (saleable)
71
133
-47.0%
77
-8.4%
Crude steel
3,917
3,864
1.4%
3,875
1.1%
Steel products, gross
3,814
3,859
-1.1%
3,781
0.9%
Steel products, net of re-rolled volumes
3,659
3,665
-0.2%
3,366
8.7%
Semi-finished products **
1,440
1,370
5.1%
867
66.1%
Finished products
2,219
2,295
-3.3%
2,499
-11.2%
Construction products
1,183
1,252
-5.5%
1,217
-2.8%
Railway products
401
376
6.6%
508
-21.0%
Flat-rolled products
209
234
-10.6%
344
-39.3%
Tubular products
264
277
-4.4%
271
-2.5%
Other steel products
162
156
3.6%
159
1.8%
Note. Numbers in this table and the tables below may not add to totals due to rounding.
*  Gross volume of steel products in the tables includes those re-rolled at other EVRAZ's mills. However, such volumes are eliminated as intercompany sales for purposes of EVRAZ's consolidated operating results.
** Consolidated production volumes of semi-finished products are preliminary as intra-group re-rolling volumes are yet to be finalised.
*** Includes production volumes of EVRAZ Vitkovice Steel disposed of in April 2014.
RUSSIA
Product, '000 tonnes 
Q1 2015
Q4 2014
Q1 2015/
Q4 2014, change
Q12014
Q12015/ Q12014, change
Coke (saleable)
76
111
-30.9%
111
-30.8%
Pig iron
2,744
2,729
0.5%
2,591
5.9%
Pig iron (saleable)
49
87
-43.9%
74
-34.6%
Crude steel
3,055
2,979
2.6%
2,852
7.1%
Steel products, gross
2,868
2,891
-0.8%
2,649
8.2%
Steel products, net of re-rolled volumes
2,802
2,815
-0.5%
2,582
8.5%
Semi-finished products
1,421
1,406
1.1%
1,086
30.9%
Finished products
1,381
1,409
-2.0%
1,497
-7.7%
Construction products*
981
1,033
-5.0%
993
-1.2%
Railway products
258
237
8.5%
376
-31.5%
Other steel products
142
139
1.7%
127
11.4%
* Includes 73kt and 65kt produced in Q12015 and Q42014 respectively by EVRAZ Caspian Steel mill in Kazakhstan from EVRAZ ZSMK's billets
In Q12015 Russian steel mills were 100% utilised with crude steel output growing by 3% QoQ. Production of steel products remained largely unchanged compared to Q42014. In the past two quarters the volumes were distributed equally between semi-finished and finished goods reflecting both the seasonality (demand and number of working days in the quarter) and demand contraction in Russia. Production of construction products was most affected having gone down by 5% QoQ.
Production of railway products, including rails, surged by 9% due to higher consumption by Russian Railways for track maintenance purposes as well as increased export volumes for Latin American and Middle East markets.
In Q12015, Russian steel producers, EVRAZ included, raised domestic prices for steel products in roubles partially eliminating the dispropotion caused by steep Russian rouble devaluation versus the US dollar in Q42014. As a result, prices went up by 5-7% in US dollar terms QoQ.
In Q22015, steel production is expected to decrease compared to Q12015 as a result of total 24-day scheduled maintenance works at the EVRAZ NTMK's blast furnaces.
Average selling prices
USD/tonne (ex works)
Q1 2015
Q4 2014
Q1 2014
Coke
85
92
128
Pig iron
206
261
305
Steel products



Semi-finished products
303
392
406
Construction products
418
484
569
Railway products
512
613
775
Other steel products
421
517
594
NORTH AMERICA
Product, '000 tonnes 
Q1 2015
Q4 2014
Q1 2015/
Q4 2014, change
Q12014
Q12015/ Q12014, change
Crude steel
480
509
-5.6%
491
-2.1%
Steel products, net of re-rolled volumes
627
647
-3.1%
639
-1.8%
Construction products
76
71
5.9%
85
-11.3%
Railway products
143
139
3.2%
132
8.9%
Flat-rolled products
144
160
-10.3%
151
-4.4%
Tubular products
264
277
-4.4%
271
-2.5%
* Q12015 production volumes are preliminary
In Q12015, crude steel production declined by 6% compared to Q42014 due to the 6-day outage of the steel shop at EVRAZ Regina. The reduction in demand for oil country tubular goods (OCTG) in Canada was the main cause for the decrease in production of steel products and of tubular goods, primarily of OCTG, by 3% and 4% respectively.
Flat-rolled products output, in particular commodity plate produced at EVRAZ Portland, decreased as a result of distributors reducing their substantial inventory over-hang of imported plate.
Rail production improved by 3% QoQ supported by strong demand from Class 1 railroads.
Prices for most steel products decreased from previous quarter due to reductions in scrap prices and to the effect of distributor de-stocking in plate and OCTG products. 
Average selling prices
USD/tonne (ex works)
Q1 2015
Q4 2014
Q1 2014
Construction products
707
771
795
Flat-rolled products
938
936
919
Tubular products
1,285
1,339
1,290
UKRAINE
Product, '000 tonnes 
Q1 2015
Q4 2014
Q1 2015/
Q4 2014, change
Q12014
Q12015/ Q12014, change
Coke (saleable)
208
193
8.0%
145
43.7%
Pig iron
236
246
-4.0%
248
-4.8%
Pig iron (saleable)
22
47
-52.7%
3
693.4%
Crude steel
233
217
7.5%
253
-7.9%
Steel products
196
189
3.7%
214
-8.4%
Semi-finished products
104
80
29.4%
121
-13.9%
Finished products
92
109
-15.2%
94
-1.3%
Construction products
79
97
-18.5%
74
7.1%
Other steel products
14
12
11.2%
20
-32.2%
In Q12015, EVRAZ DMZ steel mill extended crude steel output by 8% compared to Q42014 when it had been impacted by reduced electricity supply in the country.
Production of steel products rose by 4% QoQ on the back of a 30% increase of semi-finished products for export. Deterioration of the economic environment in Ukraine and softening demand in the Russian market resulted in a decline in production of finished, mostly construction, products. 
Average selling prices
USD/tonne (ex works)
Q1 2015
Q4 2014
Q1 2014
Coke (saleable)
191
190
179
Pig iron
237
308
351
Steel products



Semi-finished products
350
402
449
Construction products
415
512
583
Other steel products
528
758
894
SOUTH AFRICA
Product, '000 tonnes 
Q1 2015
Q4 2014
Q1 2015/
Q4 2014, change
Q12014
Q12015/ Q12014, change
Pig iron
151
168
-10.4%
152
-1.1%
Crude steel
149
160
-6.9%
150
-0.3%
Steel products
123
131
-6.4%
149
-17.6%
Semi-finished products
4
2
93.5%
9
-50.2%
Finished products
119
129
-8.1%
141
-15.6%
Construction products
47
51
-8.1%
43
8.8%
Flat-rolled products
65
73
-11.1%
90
-27.9%
Other steel products
6
5
42.2%
7
-7.8%
In March 2015, the situation in the local market became difficult compared to Q42014 and the first two months of 2015, nullifying the positive effect of the turnaround plan which EVRAZ Highveld's management team had been implementing.
In view of the deteriorating business environment, the Board of Directors of EVRAZ Highveld decided to file for voluntary business rescue procedures. Starting 14 April 2015 EVRAZ Highveld has been managed by an independent rescue practitioner.
Average selling prices
USD/tonne (ex works)
Q1 2015
Q4 2014
Q1 2014
Semi-finished products
443
415
440
Construction products
689
693
642
Flat-rolled products
588
602
606
Other steel products
542
485
574
IRON ORE
Product, '000 tonnes 
Q1 2015
Q4 2014
Q1 2015/
Q4 2014, change
Q12014
Q12015/ Q12014, change
Sinter (Russia)
2,837
2,673
6.2%
2,788
1.8%
Pellets (Russia)
1,631
1,660
-1.8%
1,572
3.7%
Lumpy ore (Ukraine)
667
735
-9.2%
736
-9.3%
Fines ore (South Africa)
151
196
-23.3%
139
8.0%
Lumpy ore (South Africa) 
274
411
-33.4%
293
-6.6%
In Q12015, production of iron ore products (sinter plus pellets) in Russia stabilised growing by 3% QoQafter completion of maintenance works at one of EVRAZ ZSMK's sintering machines in November 2014. The slight decline (-2%) in production of pellets by EVRAZ KGOK is attributable to fewer working days in the quarter. The share of EVRAZ's own concentrate in production of sinter and pellets in Russia remained unchanged at 79%.
In Ukraine,higher demand for better quality product (Fe60%) requiring additional beneficiation of lumpy ore with Fe56% content resulted in a 9%decrease in production compared to Q42014. 
The fall in production of iron ore at EVRAZ Highveld's Mapochs mine in South Africa was a result of high inventory volumes due to sagging consumption by EVRAZ Highveld and external customers.
Average selling prices
USD/tonne (ex works)
Q1 2015
Q4 2014
Q1 2014
Sinter (Russia)
37
34
74
Pellets (Russia)
45
45
88
Lumpy ore (Ukraine)
32
36
66
Fines ore (South Africa)
24
39
13
COAL
Product, '000 tonnes 
Q1 2015
Q4 2014
Q1 2015/
Q4 2014, change
Q12014
Q12015/ Q12014, change
Raw coking coal (mined)
5,467
5,972
-8.5%
4,724
15.7%
Yuzhkuzbassugol
2,626
2,585
1.6%
2,867
-8.4%
Raspadskaya
2,802
3,337
-16.0%
1,857
50.9%
Mezhegeyugol
39
51
-23.5%
0
n/a
Coking coal concentrate (production)
3,407
3,770
-9.6%
3,285
3.7%
Coking coal
In Q12015, production of raw coking coal and coking coal concentrate by EVRAZ went down by 9% and 10% respectively compared to Q42014 due to a decline in production of raw coal by the Raspadskaya coal company. The Raspadskaya coal company's output decreased by 16% QoQ as a result of a planned longwall move at the Raspadskaya Koksovaya mine and unfavourable geological factors at its MUK-96 mine.
Average selling prices
USD/tonne (ex works) 
Q1 2015
Q4 2014
Q1 2014
Raw coking coal
31
37
51
Coking coal concentrate 
56
57
81
VANADIUM
Product, tonnes of V* 
Q1 2015
Q4 2014
Q1 2015/
Q4 2014, change
Q12014
Q12015/ Q12014, change


Vanadium slag, gross production
5,917
6,048
-2.2%
4,989
18.6%

Vanadium in final products (saleable)
5,199
4,492
15.7%
4,891
6.3%

*Calculated in pure vanadium equivalent
In Q12015, Vanadium slag production was 2% down compared to Q42014 due to lower output in South Africa (-12%) as a result of reduced steel production at EVRAZ Highveld.
Production of final vanadium products increased by almost 16%, mainly driven by strong demand for ferrovanadium in Russia and good feedstock availability. Besides, higher Nitrovan production was supported by improved shaft performance at EVRAZ Vametco in South Africa.
Production of oxides, vanadium aluminum and chemicals was flat QoQ.
Ferrovanadium price quotations decreased by 10.9% of LMB and 11.6% of Ryan's Notes in Q12015 compared to Q42014. EVRAZ`s average selling pricing followed this downward trend.
Average FeV indices
USD/tonne of V (ex works)
Q1 2015
Q4 2014
Q1 2014
Metal Bulletin Ferro-vanadium basis 78% min, free DDP, consumer plant, 1st grade Western Europe
21,850
24,516
25,463
Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid
24,948
28,216
28,869
Notes:
Semi-finished productsinclude slabs, billets, pipe blanks and other semi-finished products.
Construction products include beams, channels, angles, rebars, wire rods, wire, and other construction products.
Railway products include rails, wheels, tyres and other railway products.
Flat-rolled productsinclude commodity plate, specialty plate and other flat products.
Tubular productsinclude large diameter line pipes, ERW pipes and casings, seamless pipes and other tubular products.
Other steel products include rounds, grinding balls, mine uprights, strips etc. For Ukraine they also include railway products, for South Africa -rails.
###
For further information:
Media Relations: 
London: +442078328998  Moscow: +74959376871
media@evraz.com
Investor Relations:
London: +442078328990  Moscow: +74952321370
ir@evraz.com
EVRAZ is a vertically integrated steel, mining and vanadium business with operations in the Russian Federation, Ukraine, Kazakhstan, USA, Canada, Czech Republic, Italy and South Africa. EVRAZ is among the top steel producers in the world based on crude steel production of 16.1million tonnes in 2013. A significant portion of the company's internal consumption of iron ore and coking coal is covered by its mining operations. The company's consolidated revenues for the year ended 31December 2014 were US$13,061million, and consolidated EBITDA amounted to US$2,325million. 

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