MMK's Steel Segment Trading Update for Q3 2015
OREANDA-NEWS. MMK's Steel Segment pig iron output in Q3 2015 increased by 3.0% q-o-q to 2,656 thousand tonnes. This was due to the increase in productivity after heavy maintenance works done in early 2015, optimization process of blast furnace charge and less intensive current maintenance schedule.
Crude steel output in Q3 2015 increased by 5.8% q-o-q to 3,141 thousand tonnes. This was due to increased arc-furnace capacity utilisation.
In Q3 2015, shipments of finished products totalled 2,894 thousand tonnes, up 8.1% q-o-q. This significant growth was due to the seasonal recovery of demand for steel on the domestic market.
Taking advantage of the favorable situation on the domestic market the company managed to increase sales in Russia and the CIS in Q3 2015 by 19.8% q-o-q, delivering an increased domestic sales share of 80.4%.
In 9M 2015, the share of export sales remains at 23.1%: up nearly 5 p.p. y-o-y.
Sales of long products in Q3 2015 increased 28.7% q-o-q to 495 thousand tonnes, due to increasing demand for construction products since July 2015.
Sales of HVA products in Q3 2015 increased 5.4% q-o-q, mainly due to an increase in sales of galvanised steel and polymer-coated steel.
Decrease in sales of cold-rolled products in Q3 2015 by 19.6% q-o-q was due to softer demand in export markets and lower sales to the semi-integrated works and automotive sector on the domestic market.
Sales of thick plate produced at mill 5000 in Q3 2015 decreased by 32 thousand tonnes or 11.0% q-o-q, due to the irregular supply schedule of Large-diameter pipes for the construction of major Gazprom projects. In 9M 2015, shipments of mill 5000's thick plate increased by 127 thousand tonnes thousand tonnes, or 18.4%, y-o-y.
Decrease in the share of pipe steel in the production mix of mill 5000 in Q3 2015 resulted in average USD prices for its products falling by 21.8% q-o-q - faster than the decrease in average prices per overall production mix. However, in 9M 2015, the price for thick plate increased 1.3% y-o-y: significantly better than the Company's average sales prices for the same period (-21.1%).
Increase in sales of galvanised steel and polymer-coated steel in Q3 2015 by 55.9% and 54.8%, respectively, was due to seasonal recovery in demand for these products. Another important factor that made it possible to increase coated steel shipments was the rouble devaluation versus the US dollar throughout the quarter, which significantly decreased Russian producers' cost position and made it possible to substitute the import volumes more efficiently.
Average USD sales price in Q3 2015 decreased 15.5% q-o-q. This was mainly due to overall decrease in steel prices and the rouble devaluation.
Seasonal demand recovery from the construction industry resulted in better sales of finished products by MMK-Metiz in this sector. In Q3 2015, shipments amounted to 117 thousand tonnes (including 116 thousand tonnes from IIE products), up 17.3% q-o-q.