OREANDA-NEWS. MMK Group crude steel output in Q4 2013 totalled 2,913 thousand tonnes (+1.4% q-o-q).

MMK Group crude steel output in FY 2013 totalled 11,941 thousand tonnes (-8.4% y-o-y). This decline was primarily due to EAF idling at MMK Metalurji in late 2012.

MMK Group finished steel products output in Q4 2013 (excluding intra-group sales) totalled 2,723 thousand tonnes (+3.1% q-o-q), while MMK Group finished steel products output in FY 2013 totalled 11,060 thousand tonnes (-7.9% y-o-y).

MMK Group High-Value-Added (HVA) steel products output in Q4 2013 grew by 3% q-o-q to 1,318 thousand tonnes. The share of HVA products in the total output volume was 48%.

MMK Group High-Value-Added (HVA) steel products output in 12 months 2013 increased 9.3% against 12 months 2012 to 5,336 thousand tonnes. The share of HVA steel products in the total output volume in FY 2013 was 48% as compared to 41% a year before.

Finished steel products output in Q4 2013 amounted to 2,599 thousand tonnes, 1.2% higher than in Q3 2013. In FY 2013 finished steel products output totalled 10,667 thousand tonnes, 3.3% lower than in FY 2012. This decline was primarily due to a decline in export sales by 35% in FY 2013.

In Q4 2013 shipments of MMK's finished products to the domestic market remained at a high level thanks to demand for flat cold-rolled products and thick plate. In Q4 2013 the share of domestic sales in the total volume of shipments was 82%.

In FY 2013 shipments of MMK's finished products to the domestic market increased by 6.4% y-o-y, while the share of domestic sales in the total volume of shipments was around 84%.

A focus on the domestic market and commissioning of the new capacities allowed MMK to increase the share of HVA products in the total output volume to 39% in FY 2013 as compared to 34% in FY 2012.

In FY 2013 output of HVA products grew 10.8% on 12 months 2012.

Shipments of long products in Q4 2013 totalled 428 thousand tonnes, a decrease of 9.2% q-o-q. In 12 months 2013 sales of long products grew 4.3% in comparison with 12 months 2012. This increase was driven by demand for long products in the construction sector.

The increase in sales of hot-rolled products in Q4 2013 q-o-q was due to growth in exports.

Mill 5000 output in Q4 2013 increased by 13 thousand tonnes q-o-q (+7.5%) to 183 thousand tonnes. This growth was primarily due to the increase in shipments for the shipbuilding and bridge-building sectors, as well as to railway industry manufacturers.

In total, in FY 2013 thick plate mill 5000 output was 5.5% higher than in FY 2012. This was due to the completing of a number of major pipeline laying projects during FY 2013 and further diversification of client base.

Sales of galvanised and colour-coated steel in Q4 2013 decreased by 2.8% and 21.3% q-o-q, respectively, due to the end of the construction season and lower demand for products for construction.

In total, significant growth on the construction market during 2013 allowed MMK to increase sales of galvanised and colour-coated steel in FY 2013 by 45.6% and 13.1%, respectively.

The average sales price on the domestic market in Q4 2013 remained the same q-o-q, while the average exports price for the same period insignificantly increased. The decline in the average sales price in Q4 2013 by 1.4% was due to the higher proportion of exports in the total sales volume.

MMK-Metiz

Production of finished steel products at MMK-Metiz in Q4 2013 reached 116 thousand tonnes, a decrease of

16.3% q-o-q. This was due to a seasonal decline in demand for construction products.

Production and sales of finished steel products in FY 2013 grew 8.3% against FY 2012 due to overall recovery in the construction industry during the year.

The fall in production volumes of finished steel products in FY 2013 y-o-y was due to the suspension of production and sales of flat hot-rolled products since November 2012. Capacities utilisation of the running facilities increased for the same period.

HVA products output in FY 2013 increased by 1 % y-o-y to 604 thousand tonnes.

Mining segment

Following the completion of planned maintenance work, the volume of own coking coal production in Q4 2013 increased by 9.4% q-o-q to 897 thousand tonnes.

Production of coking coal concentrate in Q4 2013 remained on the same level q-o-q at 677 thousand tonnes. This was due to a decline in MMK's needs for “K” and “KC” rank coal, as well as higher ash content in the produced coal.

Production of coking coal concentrate in FY 2013 was 2,858 thousand tonnes, down 14% y-o-y. This was due to a decline in MMK's needs for coking coal as well as the sale of Novobochatsky open-cut mine in late-2013.

In-house consumption of iron ore produced by the Group in Q4 2013 decreased by 3.2% q-o-q to 966 thousand tonnes.

Consumption of iron ore from the base in Magnitogorsk in Q4 2013 reached 488 thousand tonnes, an increase of 9.2% on Q3 2013. This was due to an increase of the share of own ore in sinter burden. The decrease in iron ore produced by the Group in FY 2013 by 2.3% was due to a planned reduction in rich ore production.

Slag processing volumes in Q4 2013 fell by 13.2% q-o-q to 478 thousand tonnes. This decrease was mainly due to the decrease in volumes of slurry concentrate from slag heaps.

Slag processing volumes in FY 2013 fell by 1.7% y-o-y to 1,972 thousand tonnes. This was due to a number of improvements focused on reducing consumption of key raw materials, as well as to higher sinter cake quality following the repair of the sinter plant in Q2 2013.

Outlook

The recovery of demand on the domestic and exports markets in Q1 2014 is likely to lead to higher production and sales of finished steel goods as compared to the previous quarter.

The presentation of the MMK Group's consolidated IFRS financial results for FY 2013 is scheduled for April 2014.