Severstal announces 1Q 2015 production results

Russian steel giant PJSC Severstal announced 1Q15 operating results. The production assets remained at almost full capacity, while the mini-factories continued to further increase production.

During 2015, the group increased steel output by 2 percent to 2.96 million tonnes compared to Q4 2014 (2.89 million tonnes), which was affected by scheduled maintenance in one of the converter shops. The decrease in pig iron production by 1 percent compared to the previous quarter to 2.31 million tonnes is due to the short-term maintenance of blast furnace No. 5.

Consolidated steel sales were down 4 percent quarter-on-quarter as the company replenished inventories of its high value-added products to normal levels following a decline due to strong demand in Q4 2014. In Q1 2015, profitability from sales of hot rolled coils (HRC) increased due to export deliveries throughout the quarter against the backdrop of ruble devaluation, which led to an increase in HRC sales volumes. As a result of these factors, there was a decrease in the share of products with high added value in the sales portfolio.

Coking coal concentrate sales volumes at Vorkutaugol decreased 13 percent to 1.27 million tonnes compared to Q4 2014 (1.47 million tonnes), driven by adverse seasonal weather conditions in the region. Despite the fact that the market price environment remains challenging, especially given the rise in prices for steel products in rubles in Q1 2015, export earnings in foreign currency partially mitigated the impact of the decline in world steel prices.