EVRAZ operating results for the first quarter of 2015

Throughout the first quarter, steel production remained stable with Russian metallurgical plants operating at full capacity and amounted to 3.9 million tonnes. At the same time, the production of semi-finished products for export increased by 5 percent, and the output of railway products increased by 7 percent due to an increase in orders from the main consumers of EVRAZ, compared to the operating indicators of the 4th quarter of 2014.

Russian production of construction products decreased by 5 percent compared to the previous quarter. Rail production rose 9 percent on the back of increased consumption in the Russian market for railroad construction and maintenance, as well as an increase in exports to Latin America and the Middle East.
The decline in production of other steel products was driven by weaker demand and increased competition for construction products in Russia and flat products in North America. The share of finished steel products in the total volume decreased to 61 percent in the first quarter of 2015 from 63 percent in the fourth quarter of 2014 due to an increase in the production of semi-finished products for export, which is associated with weak seasonal demand in the Russian construction market.

Coking coal production and concentrate production declined by 9 percent and 10 percent, respectively, due to lower production at the Raspadskaya coal mine as a result of scheduled maintenance. In Q2 2015, steel production is expected to decrease compared to Q1 as a result of 24-day scheduled maintenance at EVRAZ NTMK blast furnaces.

At EVRAZ Regina, steel and pipe production, mainly from OCTG, decreased by 3 percent and 4 percent, respectively. The main reason for the decline is attributed to lower demand for oil country tubular goods (OCTG) in Canada. The output of flat products, in particular at EVRAZ Portland, has decreased. Railroad production rose 3 percent QoQ, supported by strong demand from the railways.