OREANDA-NEWS. PAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world’s leading vertically integrated steel and steel-related mining companies, today announces its operational results for Q1 2015.

Q1 2015 GROUP HIGHLIGHTS

  • Crude steel production increased 2% q/q to 2.96 mln tonnes (Q4 2014: 2.89 mln tonnes) with the prior quarter impacted by scheduled maintenance at one of the BOFs. Lower hot metal production (down 1% q/q to 2.31 mln tonnes) reflects short-term maintenance at BF#5.
  • Steel assets continued to run at near to full capacity, with the Balakovo mini-mill further ramping-up production.
  • Consolidated sales of steel products declined 4% q/q as the Company built its internal stock of high value-added (HVA) products to normal levels after divesting inventories against strong demand in Q4 2014.
  • There has been an increase in profitability for hot-rolled coil (HRC) export deliveries almost throughout the entire quarter on the back of RUB devaluation, which resulted in higher HRC sales volumes.
  • The abovementioned factors resulted in a 6 ppts decrease of the share of HVA products in the sales portfolio, to 46% (Q4 2014: 52%).
  • Coking coal concentrate sales volumes at Vorkutaugol decreased 13% q/q to 1.27 mln tonnes (Q4 2014: 1.47 mln tonnes) due to seasonal severe weather conditions in the region.

Whilst the pricing environment remains challenging, the sharp RUB devaluation triggered a round of RUB-nominated price increases in Q1 2015 in order to catch up with export USD-nominated parity. This has partially mitigated the impacts of both the RUB devaluation and the global steel prices decline.

SUMMARY OF KEY PRODUCTION, SALES VOLUMES AND SELLING PRICES DATA

Production, tonnes

Q1 2015

Q4 2014

Change, %

Q1 2015

Q1 2014

Change, %

Crude steel (Russian Steel)

2 959 389

2 891 739

2%

2 959 389

2 713 759

9%

Hot metal (Russian Steel)

2 305 312

2 320 277

(1%)

2 305 312

2 246 364

3%

Sales volumes, tonnes

Q1 2015

Q4 2014

Change, %

Q1 2015

Q1 2014

Change, %

Coking coal concentrate

1 272 642

1 470 621

(13%)

1 272 642

1 391 490

(9%)

Iron ore pellets

2 576 453

2 754 450

(6%)

2 576 453

2 582 560

(0%)

Iron ore concentrate

984 272

980 782

0%

984 272

1 099 297

(10%)

Total steel products (Consolidated)

2 544 868

2 643 552

(4%)

2 544 868

2 405 426

6%

Total steel products (Russian Steel)

2 558 524

2 654 466

(4%)

2 558 524

2 453 932

4%

Average price, \$/tonne

Q1 2015

Q4 2014

Change, %

Q1 2015

Q1 2014

Change, %

Coking coal concentrate, Vorkutaugol

64

76

(16%)

64

96

(33%)

Iron ore pellets, Karelsky Okatysh

53

55

(4%)

53

107

(50%)

Iron ore concentrate, Olkon

32

36

(11%)

32

70

(54%)

Hot-rolled coil (RSD)

394

450

(12%)

394

469

(16%)

 

High value added steel products, %

Q1 2015

Q4 2014

Change, %

Q1 2015

Q1 2014

Change, %

Severstal (Consolidated)

46%

52%

(6  ppts)

46%

48%

(2 ppts)

Severstal Russian Steel

46%

52%

(6  ppts)

46%

47%

(1 ppts)