Severstal announces 2Q 2019 production results

PJSC Severstal announces production results for the second quarter of 2019. Hot metal production decreased qoq in Q2 2019 to 2.30 Mt (Q1 2019: 2.36 Mt) due to short-term maintenance work at BCP # 1, BCP # 4 and PZ # 5. Steel production remained largely unchanged at 3.06 million tonnes (Q1 2019: 3.04 million tonnes), largely reflecting the growth in EAF steel production. Steel product sales remained unchanged from the prior quarter at 2.84 million tonnes in Q2 2019 (Q1 2019: 2.83 million tonnes). The share of domestic sales increased to 70% due to the increased attractiveness of domestic sales (Q1 2019: 65%).

The share of high value-added products in the sales portfolio increased by 2% to 46% (Q1 2019: 44%), reflecting lower sales of semi-finished products, hot rolled coil products and an increase in sales of galvanized steels and painted large diameter pipes.

Sales volumes of coking coal concentrate from Vorkutaugol decreased by 7% on the back of planned short-term upgrades at the concentrators in Q2 2019. Meanwhile, coal production at Vorkutaugol mines (PZU) in Q2 2019 increased by 13% QoQ.

Iron ore pellet sales increased by 2% to 2.90 million tonnes (Q1 2019: 2.83 million tonnes) due to seasonal factors, despite lower production.

Iron ore concentrate sales volumes increased by 10% to 1.43 million tonnes (Q1 2019: 1.30 million tonnes) following an increase in production.

Hot metal output increased by 1% YoY in 1H 2019 to 4.67 Mt (H1 2018: 4.61 Mt) thanks to improved maintenance efficiency and improved raw material quality. Crude steel production increased to 6.10 million tonnes (H1 2018: 6.03 million tonnes), driven mainly by higher EAF steel production and improved plant performance.

Sales volumes of coking coal concentrate from Vorkutaugol increased 44% YoY driven by higher coal production. Iron ore concentrate sales volumes increased by 3% YoY to 2.73 mt (1H 2018: 2.66 mt), mainly due to increased production at the Yakovlevsky mine.

The share of HVA products in the 1st half of 2019 remained high at 45%, which mainly reflects the increase in sales of galvanized and painted coatings after the launch of new production lines, which reached full capacity in the 1st quarter of 2019.