REG - Evraz Plc - EVRAZ Q4 2020 TRADING UPDATE

EvrazAnnouncement

29/01/2021 07:01

RNS Number : 2820N
  
Evraz Plc
  
29 January 2021
  
 

29 January 2021 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group") today released its trading update for the fourth quarter and full year 2020.
Q4 2020 vs Q3 2020 HIGHLIGHTS
·      In Q4 2020, EVRAZ' consolidated crude steel output rose by 7.4% QoQ, mainly due to higher production volumes at EVRAZ NTMK following the completion of scheduled capital repairs during Q3 2020, as well as improved production volumes at EVRAZ North America, which grew by 26.6% QoQ.
·      Total sales of steel products increased by 12.0% QoQ, driven primarily by sales of semi-finished products, which grew by 30.4%. This, in turn, was mainly the result of a recovery in export markets and weaker demand for finished construction products in Russia due to seasonal factors. 
·      Total raw coking coal production rose by 26.1% QoQ, driven by the relaunch of production at the Razrez Raspadsky open pit as well as better production volumes at the Raspadskaya mine.
·      Coking coal concentrate production grew by 6.4% QoQ, mainly due to increased coal mining volumes.
·      External sales volumes of coking coal products fell by 19.2% QoQ, due to a deficit of GZh grade coal amid longwall move at the Uskovskaya mine as well as elevated levels of Q2-Q3 2020 sales amid utilisation of stockpiles.
·      External sales of iron ore products decreased by 8.4% QoQ, amid higher consumption of pellets by EVRAZ NTMK following the successful launch of blast furnace no. 6 in Q3 2020.
·      Sales of vanadium products rose by 51.4% QoQ, mainly due to higher steel utilisation rates, following increased FeV demand also from the automotive industry as well as some increase of oxide and FeV sales to China during Q4 2020.
FY2020 vs FY2019 HIGHLIGHTS
·      In 2020, EVRAZ' consolidated crude steel production remained almost flat YoY (-1.3%), despite challenges created by the COVID-19 pandemic. In addition, turbulence in the oil and gas markets led to lower demand, resulting in decrease of production volumes at EVRAZ North America.
·      Sales volumes of semi-finished products increased by 6.1% YoY, primarily due to a change in the product mix in favour of higher slab and billets sales to export destinations following a decrease in demand in Russia during the COVID-19 pandemic. 
·      Sales of finished products declined by 10.1%, mainly attributable to the sale of Palini e Bertoli in 2019, as well as lower tubular and flat-rolled products sales at EVRAZ North America, amid unfavourable market conditions caused by the COVID-19 pandemic.
·      Production of raw coking coal fell by 21.0% YoY, due to a halt in mining at the Razrez Raspadsky open pit from May to September 2020, the idling of the Mezhegeyugol mine from March 2020 and lower production volumes at the Raspadskaya mine due to challenging geological conditions.
·      External iron ore product sales rose by 52.7% YoY, primarily as a result of higher shipments to external markets amid lower consumption of pellets by EVRAZ NTMK during a major overhaul of blast furnace no.6, which was successfully launched in Q3 2020.
·      Sales of final vanadium products declined by 2.2% YoY, mainly due to reduced global FeV demand, following the imposition of COVID-19 restrictions (which were partially compensated by changing the regional sales and product mix to serve the more active Chinese oxide market during 2020).



Product, '000 tonnes 


Q4

2020


Q3

2020


Q4 2020/ Q3 2020, change


12m

 2020


12m

2019


12m 2020/ 12m 2019, change




Total crude steel production


3,467


3,227


7.4%


13,630


13,814


-1.3%




Russia


3,044


2,893


5.2%


12,050


11,953


0.8%




North America


423


334


26.6%


1,580


1,861


-15.1%




Total raw coking coal mined


6,021


4,775


26.1%


20,653


26,140


-21.0%




Total coking coal concentrate

production


4,088


3,873


5.6%


15,528


15,922


-2.5%




Iron ore products production


3,642


3,508


3.8%


14,205


13,765


3.2%




Total sales of steel products 


3,410


3,046


12.0%


13,062


13,479


-3.1%




   Semi-finished products


1,707


1,309


30.4%


6,183


5,828


6.1%




   Finished products 


1,703


1,737


-1.9%


6,879


7,651


-10.1%




Total sales of third-party steel products


209


267


-21.7%


848


801


5.9%




Sales of coking coal products


2,797


3,460


-19.2%


12,336


11,053


11.6%




Sales of iron ore products


445


486


-8.4%


1,732


1,134


52.7%




Sales of vanadium in slag


1,763


1,605


9.8%


6,129


6,451


-5.0%




Sales of vanadium final products 1


4,207


2,779


51.4%


12,604


12,883


-2.2%



Note. Numbers in this table and the tables below may not add up to totals due to rounding.
1 In tonnes of pure vanadium
 




 
STEEL SEGMENT
Total production volumes



Product, '000 tonnes 


Q4 2020


Q3 2020


Q4 2020/ Q3 2020, change


12m 2020


12m 2019


12m 2020/ 12m 2019, change




Pig iron production


2,851


2,686


6.1%


11,157


11,016


1.3%




EVRAZ ZSMK


1,564


1,556


0.5%


6,208


6,072


2.2%




EVRAZ NTMK


1,287


1,130


13.9%


4,949


4,944


0.1%




Crude steel production


3,044


2,893


5.2%


12,050


11,953


0.8%




EVRAZ ZSMK


1,933


1,880


2.8%


7,671


7,659


0.2%




EVRAZ NTMK


1,111


1,013


9.7%


4,379


4,294


2.0%




Total steel products production, net of re-rolled volume1


2,876


2,600


10.6%


11,082


11,018


0.6%




EVRAZ ZSMK


1,758


1,608


9.3%


6,766


6,817


-0.7%




EVRAZ NTMK


1,043


930


12.2%


3,999


3,590


11.4%




EVRAZ Caspian Steel


75


62


21.0%


317


283


12.0%




Iron ore products production


3,642


3,508


3.8%


14,205


13,765


3.2%




Pellets (EVRAZ KGOK)


1,660


1,607


3.3%


6,548


6,203


5.6%




Sinter (EVRAZ KGOK)


928


833


11.4%


3,582


3,511


2.0%




Concentrate saleable (EVRAZ KGOK, EVRAZ ZSMK)


1,054


1,068


-1.3%


4,075


4,051


0.6%




Coking coal concentrate production


473


475


-0.4%


1,930


1,947


-0.9%




From own raw coal2


371


317


17.0%


1,518


1,335


13.7%




From third-party raw coal


102


158


-35.4%


412


612


-32.7%




Gross vanadium slag production3


5,037


4,419


14.0%


19,533


18,380


6.3%



Note. Numbers in this table and the tables below may not add up to totals due to rounding.
1 Including EVRAZ Palini e Bertoli
 2 From Coal segment

3 In tonnes of pure vanadium
In Q4 2020, pig iron production increased by 6.1% QoQ, as the capital repair of blast furnace no. 5 was completed in Q3 2020 at EVRAZ NTMK. In FY2020, EVRAZ` pig iron production remained almost flat YoY.
Crude steel production volumes rose by 5.2% QoQ, as scheduled capital repairs during Q3 2020 were completed. In FY2020, the production of crude steel remained almost flat YoY, which was in line with pig iron production volumes.
The total output of steel products increase by 10.6% QoQ, following the completion of scheduled capital repairs at EVRAZ ZSMK in Q3 2020 and a change in the product mix at EVRAZ NTMK. EVRAZ Caspian Steel increased production by 21.0% QoQ, due to higher market demand. In FY2020, the total output of steel products remained flat YoY. This was mainly due to a 11.4% YoY increase in production at EVRAZ NTMK, amid higher volumes of semi-finished and construction products, partly offset by the sale of Palini e Bertoli.
Output of iron ore products went up by 3.8% QoQ, as scheduled capital repairs at EVRAZ KGOK were completed in Q3 2020. In FY2020, output of iron ore products rose by 3.2% YoY, following higher consumption of pellets, lower unscheduled downtime and increased operational efficiency at EVRAZ KGOK.
Consolidated output of vanadium slag increased by 14.0% QoQ, due to higher volumes of pig iron duplex processing. In FY2020, output of vanadium slag climbed by 6.3% YoY, due to the higher vanadium content in pig iron.
 
Total sales volumes



Product, '000 tonnes 


Q4 2020


Q3

2020


Q4 2020/ Q3 2020, change


12m

2020


12m

2019


12m 2020/ 12m 2019, change




Coke


74


130


-43.1%


390


361


8.0%




Steel products, external sales


3,046


2,703


12.7%


11,377


11,273


0.9%




Semi-finished products


1,707


1,309


30.4%


6,039


5,636


7.2%




   Slabs


849


436


94.7%


2,592


2,443


6.1%




   Billets


722


735


-1.8%


2,933


2,519


16.4%




   Other steel products1


136


138


-1.4%


514


674


-23.7%




Finished products


1,339


1,394


-3.9%


5,338


5,636


-5.3%




   Construction products


845


925


-8.6%


3,392


3,331


1.8%




   Railway products


320


310


3.2%


1,299


1,393


-6.7%




   Flat products


0


0


n/a


0


321


-100.0%




   Other steel products


174


159


9.4%


647


591


9.5%




Steel products, inter-segment sales


21


3


600.0%


67


318


-78.9%




Third-party steel products, external sales 


209


267


-21.7%


848


801


5.9%




Iron ore products, external sales


445


486


-8.4%


1,732


1,134


52.7%




Pellets


445


486


-8.4%


1,732


1,134


52.7%




Sales of vanadium in slag


1,763


1,605


9.8%


6,129


6,451


-5.0%




Sales of vanadium final products2


4,207


2,779


51.4%


12,604


12,883


-2.2%



Note. Numbers in this table and the tables below may not add to totals due to rounding.
1 Includes tonnes of pig iron 
2 In tonnes of pure vanadium
 
In Q4 2020, external sales of steel products rose by 12.7% QoQ. Sales of semi-finished products surged by 30.4% QoQ, driven by a recovery in export markets and weaker demand for finished construction products in Russia due to seasonal factors.  This resulted in a change in the sales mix in favour of semi-finished products.
 
In FY 2020, sales volumes of semi-finished products were up 7.2% YoY, primarily due to a change in the product mix in favour of higher slab and billets sales to export destinations following a decrease in demand in Russia amid the COVID-19 pandemic.
 
Sales of finished products dropped by 3.9% QoQ, due to a change in the product mix. In FY2020, sales volumes of finished products declined by 5.3% YoY, mainly due to the sale of Palini e Bertoli in 2019 and lower demand for railway products on the domestic market.
 
Sales of iron ore products fell by 8.4% QoQ, amid higher consumption of pellets by EVRAZ NTMK, following the successful launch of blast furnace no. 6 in Q3 2020. In FY2020, primarily as a result of higher shipments to external markets amid lower consumption of pellets by EVRAZ NTMK at the time of a major overhaul of blast furnace no.6 which was successfully launched in Q3 2020.
 
Sales of vanadium products rose by 51.4% QoQ, mainly due to higher steel utilisation rates, following increased FeV demand also from the automotive industry as well as some increase of oxide and FeV sales to China during Q4. In FY2020, sales of final vanadium products declined by 2.2% YoY, mainly due to reduced global FeV demand, following the imposition of COVID-19 restrictions.



Cash cost, US$/t


Q4 
2020


Q3 
2020


Q4 2020 / Q3 2020, change


 12m 
2020


 12m 
2019


12m 2020 / 12m 2019, change




Slab cash cost vertically integrated


224 


200


12.0%


213 


236


-9.7%




Iron ore products (Fe 62%)


37 


35


5.7%


36 


41


-12.2%













 
Average selling prices




US$/tonne (ex-works)


Q4 
2020


Q3 
2020


12m 
2020


12m 
2019





Coke


177


135


155


217




Steel products


455


435


442


483




Semi-finished products1


374


315


333


361




Construction products


494


473


479


534




Railway products


732


796


818


823




Other steel products


516


477


498


576




Pellets


78


61


60


70




Metal Bulletin Ferro-Vanadium basis 78% min, free DDP, consumer plant, 1st grade Western Europe2


24.38


24.23


25.02


41.62




Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid2


23.11


21.81


23.85


49.18



1 Includes prices for pig iron
2 US$/kgV
 
In Q1 2021, pig iron production volumes are expected to decrease slightly as a result of fewer operational days in Q1 2021. Iron ore pellets and sinter production volumes are expected to remain flat. 



STEEL, NORTH AMERICA SEGMENT
 
Production and sales volumes



Product, '000 tonnes 


Q4
2020


Q3 2020


Q4 2020/
Q3 2020, change


12m 2020


12m 
2019


12m 2020/ 12m 2019, change




Crude steel


423


334


26.6%


1,580


1,861


-15.1%




EVRAZ US mills


196


181


8.3%


838


925


-9.4%




EVRAZ Canadian mills


227


153


48.4%


743


936


-20.6%




Total steel products production, net of re-rolled volume 


377


377


0.0%


1,668


2,212


-24.6%




EVRAZ US mills


270


257


4.8%


1,125


1,418


-20.7%




EVRAZ Canadian mills


107


119


-10.4%


542


794


-31.7%




Sales of steel products


364


343


6.2%


1,685


2,207


-23.7%




Semi-finished products 


0


0


n/a


144


192


-25.0%




Construction products


68


61


11.8%


262


256


2.3%




Railway products 


99


91


8.8%


404


441


-8.4%




Flat-rolled products 


113


100


13.0%


382


523


-27.0%




Tubular products 


84


91


-7.7%


494


795


-37.9%



 
In Q4 2020, crude steel production was 26.6% higher QoQ, following increased demand for flat-rolled and construction products driven by a market recovery. In FY2020, crude steel production was down 15.1% YoY, mainly due to market turbulence amid the COVID-19 pandemic and energy market uncertainty, which led to falling demand and lower production volumes.
 
Semi-finished products sales fell by 25.0% YoY, following the fulfilment of a contract with a key customer.
 
Sales of construction products and railway products went up by 11.8% and 8.8% respectively QoQ, due to improved market conditions and additional steel availability. Sales of railway products in FY 2020 decreased by 8.4% YoY, primarily due to reduced demand driven by the COVID-19 pandemic.
 
Flat-rolled product sales rose by 13.0% QoQ, as a result of improving market conditions. In FY2020, sales of flat-rolled products dropped by 27.0% YoY, as market demand contracted amid the COVID-19 pandemic.
 
Tubular products sales declined by 7.7% QoQ, and 37.9% YoY, as turbulence in the oil and gas markets led to falling demand, resulting in the idling of the Group's OCTG mills in Canada and the US. At the same time, line pipe production continued to be stable during the period as both large and small diameter mills were producing to current orders.
 




 
Average selling prices



US$/tonne (ex-works)


Q4
2020


Q3
2020


12m
2020


12m
2019




Construction products


677


649


664


745




Flat-rolled products


728


719


754


911




Tubular products


1 327


1 401


1 349


1 340



 
In Q1 2021, production and sales volumes for construction, flat-rolled and rail products are expected to continue to improve in line with market recovery. For tubular products, the uncertainty in energy markets remains a significant factor impacting North American customers, however, the OCTG market has started demonstrating early signs of returning demand.
 
 
COAL SEGMENT
Production volumes



Product, '000 tonnes 


Q4
2020


Q3
2020


Q4 2020/ Q3 2020, change


12m 2020


12m

2019


12m 2020/ 12m 2019, change




Raw coking coal (mined)


6,021


4,775


26.1%


20,653


26,140


-21.0%




Yuzhkuzbassugol


3,257


3,341


-2.5%


11,355


12,180


-6.8%




Raspadskaya


2,764


1,434


92.7%


9,262


12,824


-27.8%




Mezhegeyugol


0


0


n/a


36


1,136


-96.8%




Coking coal concentrate (production)


3,615


3,398


6.4%


13,598


13,975


-2.7%




Produced at Yuzhkuzbassugol coal

washing plants


1,804


1,506


19.8%


6,049


6,247


-3.2%




Produced at the Raspadskaya coal

washing plant


1,811


1,892


-4.3%


7,549


7,728


-2.3%



 
In Q4 2020, overall raw coking coal output grew by 26.1% QoQ, driven by re-launched production at the Razrez Raspadsky open pit as well as better production volumes at the Raspadskaya mine. In FY2020, production of raw coking coal went down by 21.0% YoY, due to a halt in mining at the Razrez Raspadsky open pit from May to September 2020, the idling of Mezhegeyugol mine starting from March 2020 and lower production volumes at the Raspadskaya mine amid challenging geological conditions.
 
Output of coking coal concentrate rose by 6.4% QoQ, mainly due to increased coal mining volumes.
 
Sales volumes



Product, '000 tonnes 


Q4 
2020


Q3 
2020


Q4 2020/ Q3 2020, change


12m 
2020


12m 
2019


12m 2020/ 12m 2019, change




External sales


        2,797 


        3,460 


-19.2%


12,336


11,053


11.6%




Raw coking coal*


250


822


-69.6%


2,271


1,929


17.7%




Coking coal concentrate*


2,547


2,638


-3.4%


10,065


9,124


10.3%




Intersegment sales


1,663


1,824


-8.8%


6,990


6,569


6.4%




    Raw coking coal


496


622


-20.2%


2,323


2,044


13.6%




Coking coal concentrate


1,166


1,202


-2.9%


4,667


4,525


3.1%



*The 12m 2019 data have been adjusted
External sales volumes of coking coal products fell by 19.2% QoQ, due to a deficit of GZh grade coal amid longwall move at the Uskovskaya mine as well as elevated levels of Q2-Q3 2020 sales amid utilisation of stockpiles. In FY2020, external sales volumes of coking coal products increased by 11.6% YoY, following higher shipments of raw coal from the Uskovskaya mine. Coking coal concentrate sales volumes rose by 10.3% YoY, due to higher shipments to Southeast Asian countries and Russia, amid the greater utilisation of accumulated stockpiles during Q2-Q3 2020.



Cash cost, US$/t


Q4
2020


Q3
2020


Q4 2020 / Q3 2020, change


12m
2020


12m
2019


12m 2020 / 12m 2019, change




Coking coal concentrate


26


31


-16.1%


31


35


-11.4%



 
Average selling prices



 
US$/tonne (ex-works) 
 


Q4
2020


Q3
2020


12m
2020


12m
2019




Raw coking coal


              34 


              30 


34


49




Coking coal concentrate 


              56 


              57 


62


99



 
In Q1 2021, raw coal production is expected to increase QoQ, amid the completion of the longwall move at the Uskovskaya mine, a return to planned capacity after the resumption of production at the Razrez Raspadsky open pit, and favourable mining and geological conditions at the Esaulskaya mine. This will be partly offset by unfavourable mining and geological conditions at the Alardinskaya and Raspadskaya mines.
 




 
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. 
 
 
 
###
 
For further information:
 
Media Relations: 
+7 495 937 6871
media@evraz.com
 
Investor Relations:
+7 495 232 1370
ir@evraz.com
 
EVRAZ is a vertically integrated steel, mining and vanadium business with operations in Russia, Kazakhstan, the US, Canada and Czech Republic. EVRAZ is among the top steel producers in the world based on crude steel production of 14 million tonnes in 2019. A significant portion of the Group's internal consumption of iron ore and coking coal is covered by its mining operations. The Group's consolidated revenues for the year ended 31 December 2019 were US$11,905 million, and consolidated EBITDA amounted to US$2,601 million.
 

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