OREANDA-NEWS. PAO Severstal announces its operational results for Q2 2015 and H1 2015.

In Q2 hot metal production decreased 1% q/q to 2.29 mln tonnes (Q1 2015: 2.31 mln tonnes). At the same time, crude steel production decreased 4% q/q to 2.85 mln tonnes (Q1 2015: 2.96 mln tonnes). While this suggests lower consumption of scrap material in steelmaking process, it also reflects an impact of scheduled maintenance at the BOF#3 and continuous caster #2 and #4.

Consolidated sales of steel products increased 4% q/q partially due to seasonal increase in demand, despite anticipated weaker steel consumption domestically. Moreover, Severstal's proximity to export markets allowed the Company the flexibility to allocate additional volumes for export.

The share of high value-added (HVA) products in the sales portfolio improved 1 ppt to 47% (Q1 2015: 46%) largely due to a 13% q/q increase in downstream products sales and a reduction in long products sales q/q. These have partially offset a 10% q/q increase in hot-rolled coil sales.

Coking coal concentrate sales increased 15% q/q in spite of a decrease in ROM-coal output volumes in Q2 at Vorkutaugol on the back of scheduled long-walls repositioning activity in June 2015. The former is largely a low-base effect with washing plant operations being negatively impacted by severe weather conditions in Q1.

Whilst the pricing environment on the global markets remains challenging, Severstal average USD-nominated selling prices for steel products improved q/q owing to RUB appreciation. Specifically, after catching up with the USD-nominated parity, domestic prices reached an unusual premium vs. export prices.