REG - Evraz Plc - EVRAZ Q2 2019 TRADING UPDATE - CORRECTION
RNS Number : 4113HEvraz Plc31 July 2019This announcement replaces the RNS announcement number 2704H released at 07:00 UK time today,
31 July 2019.The figures in the table "Average selling prices" in the "Coal segment" section on page 9 of the pdf version should read as follows:
Average selling prices
US$/t (ex works)
Q2
2019
Q1
2019
H1
2019
H1
2018
Raw coking coal
62
57
59
70
Coking coal concentrate
104
117
110
127
EVRAZ Q2 2019 TRADING UPDATE
31 July 2019 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group") today released its trading update for the second quarter of 2019.
Q2 2019 vs Q1 2019 HIGHLIGHTS
· In Q2 2019, EVRAZ' consolidated crude steel output remained flat QoQ.
· Total steel product sales rose by 7.7% QoQ, driven by higher demand. Sales of finished products climbed by 10.1% due to higher sales of construction products in Russia and railway products in North America.
· Raw coking coal production grew by 2.2% QoQ. Raw coking coal concentrate output climbed by 21% QoQ to 4.5mt, mainly due to greater processing volumes and lower ash content.
· External sales volumes of coking coal products surged by 10.3% QoQ due to increased coking coal concentrate sales after the longwall repositioning at Yuzhkuzbassugol's Alardinskaya mine in Q1 2019 and greater shipments to Russia's Far East. This was partly offset by lower raw coking coal sales amid lower demand at the markets in Eastern Europe.
· External sales of iron ore products dropped by 49.4% QoQ as volumes were redistributed towards exports amid reduced demand on the domestic market.
· Sales of final vanadium products rose by 29.7% QoQ, as lower prices and FeV stocks at end users have stimulated spot demand, particularly in the EU, Asia and North America.
Product, kt
Q2
2019
Q1
2019
Q2 2019/ Q1 2019, change
H1 2019
H1 2018
H1 2019/ H1 2018, change
Total crude steel production
3,507
3,488
0.5%
6,995
6,814
2.7%
Russia
3,006
2,986
0.7%
5,992
5,726
4.6%
Ukraine
0
0
n/a
0
154
-100%
North America
501
502
-0.2%
1,003
934
7.4%
Total raw coking coal mined
6,996
6,844
2.2%
13,840
11,391
21.5%
Total coking coal concentrate
production4,458
3,684
21.0%
8,142
8,061
1.0%
Iron ore products production
3,533
3,636
-2.8%
7,169
6,855
4.6%
Total sales of steel products1
3,377
3,135
7.7%
6,512
6,220
4.7%
Semi-finished products
1,395
1,335
4.5%
2,730
2,516
8.5%
Finished products2
1,982
1,800
10.1%
3,782
3,704
2.1%
Total sales of third-party steel
products221
180
22.8%
401
417
-3.8%
Sales of coking coal products
2,929
2,656
10.3%
5,585
5,599
-0.3%
Sales of iron ore products3
235
464
-49.4%
699
1,089
-35.8%
Sales of Vanadium in slag3
1,660
1,176
41.2%
2,836
2,814
0.8%
Sales of vanadium final products4
3,266
2,518
29.7%
5,784
6,456
-10.4%
Note. Numbers in this table and the tables below may not add up to totals due to rounding.
1 The Q2 2019 production and sales volumes of EVRAZ North America are preliminary.
2 The Q1 2019 data have been adjusted.
3 The H1 2018 data have been adjusted.
4 in tonnes of pure vanadium
STEEL SEGMENT
Total production volumes
Product, kt
Q2 2019
Q1 2019
Q2 2019/ Q1 2019, change
H1 2019
H1 2018
H1 2019/ H1 2018, change
Pig iron production
2,745
2,712
1.2%
5,457
5,252
3.9%
EVRAZ ZSMK
1,530
1,471
4.0%
3,001
2,912
3.1%
EVRAZ NTMK
1,215
1,241
-2.1%
2,456
2,186
12.4%
EVRAZ DMZ
0
0
n/a
0
153
-100%
Crude steel production
3,006
2,986
0.7%
5,992
5,880
1.9%
EVRAZ ZSMK
1,942
1,895
2.5%
3,837
3,752
2.3%
EVRAZ NTMK
1,064
1,091
-2.5%
2,155
1,974
9.2%
EVRAZ DMZ
0
0
n/a
0
154
-100%
Total steel products production, net of re-rolled
volume2,759
2,622
5.2%
5,381
5,225
3.0%
EVRAZ ZSMK
1,737
1,686
3.0%
3,423
3,388
1.0%
EVRAZ NTMK
844
794
6.3%
1,638
1,430
14.5%
EVRAZ DMZ
0
0
n/a
0
132
-100%
EVRAZ Palini e Bertoli
101
97
4.1%
198
186
6.5%
EVRAZ Caspian Steel
77
45
71.1%
122
89
36.0%
Iron ore products production
3,533
3,636
-2.8%
7,169
6,855
4.6%
Pellets (EVRAZ KGOK)
1,573
1,643
-4.3%
3,216
3,277
-1.9%
Sinter (EVRAZ KGOK)
928
898
3.3%
1,826
1,735
5.2%
Concentrate (EVRAZ KGOK, Evrazruda)
1,032
1,095
-5.8%
2,127
1,843
15.4%
Coking coal concentrate production
489
454
7.7%
943
1,041
-9.3%
From own raw coal1
341
256
33.2%
597
601
-0.7%
From third-party raw coal
148
198
-25.3%
346
440
-21.2%
Gross vanadium slag production2
4,533
4,446
2.0%
8,979
8,414
6.7%
Note. Numbers in this table and the tables below may not add up to totals due to rounding.
1 from Coal segment
2 in tonnes of pure vanadium
In Q2 2019, EVRAZ` pig iron and crude steel output remained mostly flat QoQ at the Russian mills.
Output of iron ore products fell by 2.8% QoQ to 3.5mt, mainly due to unscheduled downtime of burning machine no. 1 at EVRAZ KGOK and a planned maintenance outage of the Tashtagol mine at Evrazruda.
Total sales volumes
Product, kt
Q2
2019
Q1
2019
Q2 2019/
Q1 2019, change
H1 2019
H1 2018
H1 2019/ H1 2018, change
Coke
113
65
73.8%
178
184
-3.3%
Steel products, external sales
2,746
2,583
6.3%
5,329
5,185
2.8%
Semi-finished products
1,293
1,279
1.1%
2,572
2,505
2.7%
Slabs
572
482
18.7%
1,054
962
9.6%
Billets
545
646
-15.6%
1,191
1,301
-8.5%
Other steel products1
176
151
16.6%
327
242
35.1%
Finished products
1,453
1,304
11.4%
2,757
2,680
2.9%
Construction products
808
729
10.8%
1,537
1,541
-0.3%
Railway products
367
343
7.0%
710
669
6.1%
Flat products
98
91
7.7%
189
188
0.5%
Other steel products
180
141
28.6%
320
282
13.5%
Steel products, inter-segment sales
115
186
-38.2%
301
303
-0.7%
Third-party steel products, external sales
221
180
22.8%
401
417
-3.8%
Iron ore products, external sales
235
464
-49.4%
699
1,089
-35.8%
Pellets
235
464
-49.4%
699
1,089
-35.8%
Sales of vanadium in slag2
1,660
1,176
41.2%
2,836
2,814
0.8%
Sales of vanadium final products3
3,266
2,518
29.7%
5,784
6,456
-10.4%
Note. Numbers in this table and the tables below may not add to totals due to rounding.
1 includes tonnes of pig iron
2 The H1 2018 data have been adjusted.
3 in tonnes of pure vanadium
In Q2 2019, external sales of steel products rose by 6.3% QoQ, primarily due to higher demand. Sales of semi-finished products were mostly flat QoQ.
Sales of finished products grew by 11.4% QoQ, mainly driven by higher sales of construction products, which rose by 10.8% QoQ following an uptick in demand due to the construction season.
Sales of final vanadium products climbed by 29.7% QoQ, as lower prices and FeV stocks at end users have stimulated spot demand, particularly in the EU, Asia and North America.
Cash cost, US$/t
Q2
2019
Q1
2019
Q2 2019/ Q1 2019, change
H1
2019
H1
2018
H1 2019/ H1 2018, change
Slab cash cost vertically integrated
238
223
6.7%
230
248
-7.2%
Iron ore products (Fe 62%)
38
37
2.7%
38
37
2.7%
Average selling prices
US$/t (ex works)
Q2
2019
Q1
2019
H1
2019
H1
2018
Coke
240
223
233
255
Steel products
517
481
499
551
Semi-finished products1
392
381
387
462
Construction products
601
522
563
613
Railway products
763
743
753
702
Other steel products
598
593
596
635
Pellets
81
75
77
63
Metal Bulletin Ferro-Vanadium basis 78% min, free DDP,
consumer plant, 1st grade Western Europe239.36
73.33
56.35
65.53
Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid2
47.81
87.93
67.87
69.51
1 includes prices for pig iron
2 US$/kgV
In Q3 2019, pig iron and crude steel production volumes are expected to remain flat.
STEEL, NORTH AMERICA SEGMENT
Production and sales volumes1
Product, kt
Q2
2019
Q1 2019
Q2 2019/
Q1 2019, change
H1 2019
H1 2018
H1 2019/ H1 2018, change
Crude steel
501
502
-0.2%
1,003
934
7.4%
EVRAZ US mills
255
235
8.5%
490
446
9.8%
EVRAZ Canadian mills
246
267
-7.9%
513
488
5.1%
Total steel products production, net of re-rolled volume
615
559
10.0%
1,174
1,110
5.8%
EVRAZ US mills
397
351
13.1%
748
683
9.5%
EVRAZ Canadian mills
218
208
4.8%
426
427
-0.2%
Sales of steel products
631
553
14.1%
1,184
1,034
14.5%
Semi-finished products
102
56
82.1%
158
11
1336.4%
Construction products
70
67
4.5%
137
142
-3.5%
Railway products
120
101
18.8%
221
208
6.3%
Flat-rolled products
147
140
5.0%
287
302
-5.0%
Tubular products
192
189
1.6%
381
371
2.7%
1 The Q2 2019 production and sales volumes data are preliminary.
In Q2 2019, total output of steel products surged by 10.0% QoQ, with EVRAZ Pueblo's output up 13.1% QoQ amid greater downstream demand following the rail mill restart after unplanned downtime in Q1 2019.
Sales of semi-finished products jumped by 82.1% QoQ following higher demand from customers.
Sales of construction products rose by 4.5% QoQ due to higher demand and favourable weather.
Railway product sales climbed by 18.8% QoQ, as production volumes recovered after the rail mill outage in Q1 2019.
Sales of flat-rolled products went up by 5.0% QoQ as a result of a planned maintenance outage and a railcar supply shortages in Q1 2019.
Tubular product sales edged up by 1.6% QoQ due to the restart of coating operations at EVRAZ Regina.
Average selling prices
US$/t (ex works)
Q2
2019
Q1
2019
H1
2019
H1
2018
Construction products
769
848
808
758
Flat-rolled products
949
1,048
997
892
Tubular products
1,360
1,374
1,367
1,224
Prices for construction products went down in Q2 2019, primarily driven by falling scrap prices and sluggish market demand. Prices for flat-rolled products were lower during the period as service centres temporarily curtailed purchases amid rapidly falling scrap prices and market uncertainty, which in turn was driven by soft demand. Prices for tubular products decreased slightly during Q2 2019, reflecting softening oil country tubular goods (OCTG) markets in addition to a seasonal decline in demand.
In Q3 2019, crude steel output is expected to remain at the average level seen in Q1-Q2 2019. Tubular sales volumes should increase compared with Q2 2019, as OCTG is expected to show healthier volumes. Meanwhile, volumes of line pipe and large-diameter pipe are expected to benefit from delayed coating and delivery recognition in Q2 2019. Sales of flat-rolled products are forecast to marginally improve over the Q2 2019 volumes, driven by customer production schedules and an expected uptick in purchasing activity from service centres.
COAL SEGMENT
Production volumes
Product, kt
Q2
2019
Q1
2019
Q2 2019/ Q1 2019, Change
H1 2019
H1 2018
H1 2019/ H1 2018, change
Raw coking coal (mined)
6,996
6,844
2.2%
13,840
11,391
21.5%
Yuzhkuzbassugol
3,466
2,606
33.0%
6,072
5,475
10.9%
Raspadskaya
3,231
3,916
-17.5%
7,147
5,438
31.4%
Mezhegeyugol
299
322
-7.1%
621
478
29.9%
Coking coal concentrate (production)
3,969
3,229
22.9%
7,198
7,020
2.5%
Produced at Yuzhkuzbassugol coal
washing plants1,837
1,433
28.2%
3,270
3,495
-6.4%
Produced at the Raspadskaya coal
washing plant2,132
1,796
18.7%
3,928
3,525
11.4%
In Q2 2019, overall raw coking coal output rose by 2.2% QoQ, primarily due to higher production at Yuzhkuzbassugol's mines following a longwall move at the Alardinskaya mine in Q1 2019. This was partly offset by lower production volumes at the Raspadskaya mine due to a longwall move in Q2 2019.
Output of coking coal concentrate climbed by 22.9%, primarily due to greater processing volume and reduced ash content.
Sales volumes
Product, kt
Q2
2019
Q1
2019
Q2 2019/ Q1 2019, change
H1
2019
H1
2018
H1 2019/ H1 2018, change
External sales
2,929
2,656
10.3%
5,585
5,599
-0.3%
Raw coking coal
447*
497
-10.1%
943*
807
16.9%
Coking coal concentrate
2,482
2,160
14.9%
4,642
4,792
-3.1%
Intersegment sales
1,650
1,519
8.6%
3,169
2,932
8.1%
Raw coking coal
556
396
40.4%
952
910
4.6%
Coking coal concentrate
1,094
1,123
-2.6%
2,217
2,022
9.6%
* The data include sales volumes of 1kt of coal recognised as steam-grade coal based on its quality characteristics.
In Q2 2019, external sales volumes of coking coal products surged by 10.3% due to increased coking coal concentrate sales after the longwall repositioning at Yuzhkuzbassugol's Alardinskaya mine in Q1 2019 and greater shipments to Russia's Far East, which was partly offset by lower raw coking coal sales amid lower demand at the markets in Eastern Europe.
Cash cost, US$/t
Q2
2019
Q1
2019
Q2 2019/ Q1 2019, change
H1
2019
H1
2018
H1 2019/ H1 2018, change
Coking coal concentrate1
33
35
-5.7%
34
47
-27.7%
1 The Q1 2019 data have been adjusted.
Average selling prices
US$/t (ex works)
Q2
2019
Q1
2019
H1
2019
H1
2018
Raw coking coal
62
57
59
70
Coking coal concentrate
104
117
110
127
In Q2 2019, coking coal selling prices moved in line with global benchmarks.
In Q3 2019, raw coal production is expected to decline QoQ due to the longwall move at the Uskovskaya mine. Output will also be impacted by reduced production at Razrez Raspadsky due to the transfer of its equipment to the open-pit mining operations at the Raspadskaya-Koksovaya mine.
Notes:
Semi-finished products include 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 products include commodity plate, specialty plate and other flat products.
Tubular products include 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. They also include railway products for Ukraine.
###
For further information:
Media Relations:
London: +44 207 832 8998 Moscow: +7 495 937 6871
media@evraz.com
Investor Relations:
London: +44 207 832 8990 Moscow: +7 495 232 1370
EVRAZ is a vertically integrated steel, mining and vanadium business with operations in the Russian Federation, Kazakhstan, US, Canada, Czech Republic and Italy. EVRAZ is among the top steel producers in the world based on crude steel production of 13mt in 2018. 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 31 December 2018 were US$12,836m and consolidated EBITDA amounted to US$3,777m.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDMSCRBMTTMBBJBJL
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