TIDMEVR
RNS Number : 5510Q
Evraz Plc
28 October 2021
EVRAZ Q3 2021 TRADING UPDATE
28 October 2021 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group")
today has released its trading update for the third quarter of
2021.
Q3 2021 vs Q2 2021 HIGHLIGHTS
-- In Q3 2021, EVRAZ' consolidated crude steel output edged up
by 1.0% QoQ, mainly due to larger production volumes at EVRAZ North
America. Production at the Group's Russian operations decreased
slightly QoQ amid scheduled capital repairs.
-- Total sales of steel products decreased by 8.2% QoQ,
primarily due to slowdown of Russian construction products market
accompanied by lower sales of railway and semi-finished products
because of logistic s restrictions on the route and detentions in
ports amid inclement weather. This was partly offset by better
performance QoQ of EVRAZ North America.
-- Total raw coking coal production fell by 2.3% QoQ following
scheduled longwall movements at the Osinnikovskaya,
Yerunakovskaya-8, Uskovskaya and Raspadskaya mines. In addition,
the Raspadskaya-Koksovaya mine had to temporarily slow its
operations because of difficult geological conditions. Output from
the remaining assets increased during the quarter.
-- Total coking coal concentrate production, including both the
Steel and Coal segments, decreased by 1.8% QoQ, mainly because of
reduction of coke production at EVRAZ ZSMK. The Coal segment's
standalone coal concentrate production remained at the level of Q2
2021.
-- External sales of iron ore products decreased by 10.1% QoQ,
driven by the partial shift of sales to Q4 2021 amid temporary
logistics restrictions westwards due to vessel delays.
-- External sales of vanadium products fell by 11.8% QoQ, mainly
because of reduced global demand from the automotive sector amid
the semiconductor shortage and slowdowns in the Russian oil, gas
and rail sectors. In addition, some global steel mills scheduled
major maintenance during the summer months.
Product, '000 tonnes Q3 Q2 Q3 2021/ Q2 2021, change 9m 9m 9m 2021/ 9m 2020, change
2021 2021 2021 2020
------------------------ -------- -------- ------------------------- -------- -------- -------------------------
Total crude steel
production 3,403 3,368 1.0% 10,185 10,163 0.2%
Russia 2,912 2,953 -1.4% 8,786 9,006 -2.4%
North America 491 415 18.3% 1,399 1,157 20.9%
Total raw coking coal
mined 4,983 5,098 -2.3% 16,573 14,632 13.3%
Total coking coal
concentrate
production 3,746 3,814 -1.8% 11,796 11,440 3.1%
Iron ore products
production 3,504 3,750 -6.6% 10,648 10,563 0.8%
Total sales of steel
products(1) 2 , 978 3 , 246 -8.2% 9 , 281 9 , 652 -3.8%
Semi-finished
products 1 , 337 1 , 440 -7.2% 4 , 183 4 , 476 -6.5%
Finished products 1 , 641 1 , 806 -9.1% 5 , 098 5 , 176 -1.5%
Total sales of
third-party steel
products 213 217 -1.8% 564 639 -11.7%
Sales of coking coal
products 2,462 2,761 -10.8% 8,047 9,539 -15.6%
Sales of iron ore
products 303 337 -10.1% 951 1,287 -26.1%
Sales of vanadium in
slag 1,834 1,624 12.9% 4,593 4,366 5.2%
Sales of vanadium final
products(2) 2,864 3,247 -11.8% 9,479 8,366 13.3%
------------------------ -------- -------- ------------------------- -------- -------- -------------------------
Note. Numbers in this table and the tables below may not add up
to totals due to rounding.
(1) Includes tonnes of pig iron
(2) In tonnes of pure vanadium
CONFERENCE CALL DETAILS
A conference call to discuss the trading update will be held on
Thursday, 28 October 2021 , at:
-- 07:30 (New York time)
-- 12:30 (London time)
-- 14:30 (Moscow time)
Key speakers:
-- Sergey Markov , Director, Marketing and operational planning
-- Alexander Erenburg , Vice President, Vanadium division
-- Evgeny Terekhov , Commercial Director, Coal division
-- Olesya Afanasyeva , Senior Vice President, CFO, EVRAZ North America
To join the call, please dial:
+44 (0)330 027 1846 (local access) or 0800 UK
031 4838 (toll free)
+7 499 609 1260 (local access) or 8 800 100 Russia
9471 (toll free)
+1 334 777 6978 (local access) or 800 367 US
2403 (toll free)
Access code : 5102389
To avoid any technical inconvenience, it is recommended that
participants dial in 10 minutes before the start of the call.
The Q 3 2021 trading update presentation will be available on
the Group's website, www.evraz.com , on Thursday, 28 October 2021,
at the following link:
https://www.evraz.com/en/investors/reports-and-results/presentations/
FORWARD-LOOKING STATEMENTS
This document contains "forward-looking statements", which
include all statements other than statements of historical facts,
including, without limitation, any statements preceded by, followed
by or that include the words "targets", "believes", "expects",
"aims", "intends", "will", "may", "anticipates", "would", "could"
or similar expressions or the negative thereof. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the Group's
control that could cause the actual results, performance or
achievements of the Group to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements, including, among others, the
achievement of anticipated levels of profitability, growth, cost
and synergy of recent acquisitions, the impact of competitive
pricing, the ability to obtain necessary regulatory approvals and
licenses, the impact of developments in the Russian economic,
political and legal environment, volatility in stock markets or in
the price of the Group's shares or GDRs, financial risk management
and the impact of general business and global economic conditions.
Such forward-looking statements are based on numerous assumptions
regarding the Group's present and future business strategies and
the environment in which the Group will operate in the future. By
their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. These
forward-looking statements speak only as at the date as of which
they are made, and each of EVRAZ and the Group expressly disclaims
any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statements contained herein to
reflect any change in EVRAZ' or the Group's expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statements are based. Neither the Group, nor any
of its agents, employees or advisors intends or has any duty or
obligation to supplement, amend, update or revise any of the
forward-looking statements contained in this document.
STEEL SEGMENT
Total production volumes
Product, '000 tonnes Q3 Q2 Q3 2021/ Q2 2021, change 9m 9m 9m 2021/ 9m 2020, change
2021 2021 2021 2020
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Pig iron production 2,716 2,719 -0.1% 8,118 8,306 -2.3%
EVRAZ ZSMK 1,445 1,435 0.7% 4,304 4,644 -7.3%
EVRAZ NTMK 1,271 1,284 -1.0% 3,814 3,662 4.2%
Crude steel production 2,912 2,953 -1.4% 8,786 9,006 -2.4%
EVRAZ ZSMK 1,824 1,821 0.2% 5,455 5,738 -4.9%
EVRAZ NTMK 1,088 1,132 -3.9% 3,331 3,268 1.9%
Total steel products
production, net of
re-rolled volume 2,721 2,693 1.0% 8,070 8,206 -1.7%
EVRAZ ZSMK 1,643 1,548 6.1% 4,750 5,008 -5.2%
EVRAZ NTMK 985 1,040 -5.3% 3,039 2,956 2.8%
EVRAZ Caspian Steel 93 105 -11.4% 281 242 16.1%
Iron ore products
production 3,504 3,750 -6.6% 10,648 10,563 0.8%
Pellets (EVRAZ KGOK) 1,563 1,643 -4.9% 4,780 4,888 -2.2%
Sinter (EVRAZ KGOK) 946 922 2.6% 2,789 2,654 5.1%
Concentrate saleable
(EVRAZ KGOK, EVRAZ ZSMK) 995 1,185 -16.0% 3,079 3,021 1.9%
Coking coal concentrate
production 366 434 -15.7% 1,167 1,457 -19.9%
From own raw coal(1) 305 370 -17.6% 988 1,147 -13.9%
From third-party raw coal 61 64 -4.7% 179 310 -42.3%
Gross vanadium slag
production(2) 5,198 5,206 -0.2% 15,202 14,496 4.9%
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Note. Numbers in this table and the tables below may not add up
to totals due to rounding.
(1) From Coal segment
(2) In tonnes of pure vanadium
In Q3 2021, pig iron production at the Group's Russian mills
remained mostly flat QoQ.
Crude steel production edged down by 1.4% QoQ, driven by
scheduled capital repairs at EVRAZ NTMK.
The total output of steel products rose by 1.0% QoQ, as EVRAZ
ZSMK increased its production volumes by 6.1% QoQ through the
processing of metal stockpiled during earlier capital repairs.
Output of iron ore products fell by 6.6% QoQ, mainly because of
scheduled capital repairs at the Abagurskaya processing plant in
September. This was partly offset by an increase in sinter
production volumes of 2.6% QoQ at EVRAZ KGOK following the
completion of scheduled maintenance and repairs.
Total sales volumes
Product, '000 tonnes Q3 Q2 Q3 2021/ Q2 2021, change 9m 9m 9m 2021/ 9m 2020, change
2021 2021 2021 2020
------------------------ -------- -------- ------------------------- -------- -------- -------------------------
Coke 78 73 7.0% 224 316 -29.1%
Steel products,
external sales 2 , 558 2 , 864 -10.7% 8 , 064 8 , 331 -3.2%
Semi-finished products 1,337 1,440 -7.2% 4,183 4,332 -3.4%
Slabs 709 871 -18.6% 2,246 1,743 28.9%
Billets 533 468 13.9% 1,625 2,211 -26.5%
Other steel
products(1) 95 101 -5.9% 312 378 -17.5%
Finished products 1 , 221 1 , 424 -14.3% 3 , 881 3 , 999 -3.0%
Construction products 799 943 -15.3% 2 , 536 2 , 547 -0.4%
Railway products 250 286 -12.6% 815 979 -16.8%
Other steel products 172 195 -11.8% 530 473 12.1%
Steel products,
inter-segment sales 7 11 -36.4% 22 46 -52.2%
Third-party steel
products, external
sales 213 217 -1.8% 564 639 -11.7%
Iron ore products,
external sales 303 337 -10.1% 951 1,287 -26.1%
Pellets 303 337 -10.1% 951 1,287 -26.1%
Sales of vanadium in
slag 1,834 1,624 12.9% 4,593 4,366 5.2%
Sales of vanadium final
products(2) 2,864 3,247 -11.8% 9,479 8,366 13.3%
------------------------ -------- -------- ------------------------- -------- -------- -------------------------
Note. Numbers in this table and the tables below may not add to
totals due to rounding.
(1) Includes tonnes of pig iron
(2) In tonnes of pure vanadium
In Q3 2021, external sales of steel products fell by 10.7% QoQ,
driven by lower shipments of semi-finished and finished products in
the reporting period.
Sales of semi-finished products fell by 7.2% QoQ because of
logistics restrictions on the route and delays in ports amid
inclement weather, although shipments from factories increased
slightly. Sales volumes are expected to recover in Q4 2021.
Sales of finished products decreased by 14.3% QoQ, mainly due to
slowdown of construction products market after the successful Q2
2021. The sales of construction products declined by 15.3% QoQ
.
Sales of railway products decreased by 12.6% QoQ, primarily
because of logistics restrictions on the route and delays in ports
amid inclement weather.
Sales of iron ore products decreased by 10.1% QoQ, driven by a
partial shift of sales to Q4 2021 amid temporary logistics
restrictions westwards due to vessel delays.
External sales of vanadium products fell by 11.8% QoQ, mainly
because of reduced global demand from the automotive sector amid
the semiconductor shortage and slowdowns in the Russian oil, gas
and rail sectors. In addition, some global steel mills scheduled
major maintenance during the summer months.
Cash cost, US$/t Q3 Q2 Q3 2021/ Q2 2021, change 9m 9m 9m 2021/ 9m 2020, change
2021 2021 2021 2020
-------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Slab cash cost vertically
integrated 309 290 6.6% 292 206 41.7%
Iron ore products (Fe
62%) 40 41 -2.4% 40 36 11.1%
-------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Average selling prices
US$/tonne (ex-works) Q3 Q2 9m 9m
2021 2021 2021 2020
---------------------------------------------------------------------------------- ------- ------- ------- -------
Coke 380 307 320 149
Steel products 761 707 685 437
Semi-finished products(1) 691 604 596 318
Construction products 827 805 763 474
Railway products 900 838 859 848
Other steel products 862 740 755 492
Pellets 154 166 147 54
Metal Bulletin Ferro-Vanadium basis 78% min, free DDP, consumer plant, 1st grade
Western Europe(2) 38.22 35.94 35.02 25.23
Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid(2) 37.66 35.99 35.23 24.09
---------------------------------------------------------------------------------- ------- ------- ------- -------
(1) Includes prices for pig iron
(2) US$/kgV
In Q4 2021, iron ore production volumes are expected to increase
following the completion of repairs at EVRAZ KGOK's burning
furnaces and crushing complex in September. Pig iron production
volumes are expected to remain at the level of Q3 2021.
STEEL, NORTH AMERICA SEGMENT
Production and sales volumes
Product, '000 tonnes Q3 Q2 Q3 2021/ 9m 9m 9m 2021/ 9m 2020, change
2021 2021 Q2 2021, change 2021 2020
----------------------------------- ------- ------- ------------------ ------- ------- -------------------------
Crude steel 491 415 18.3% 1,399 1,157 20.9%
EVRAZ US mills 223 161 38.6% 611 642 -4.8%
EVRAZ Canadian mills 268 254 5.7% 789 516 52.9%
Total steel products production,
net of re-rolled volume 430 385 11.8% 1,215 1,291 -5.9%
EVRAZ US mills 278 273 1.8% 827 856 -3.4%
EVRAZ Canadian mills 153 112 36.0% 388 435 -10.8%
Sales of steel products 420 382 10.0% 1,217 1,321 -7.9%
Semi-finished products 0 0 n/a 0 144 -100.0%
Construction products 63 82 -23.3% 211 194 8.8%
Railway products 90 87 3.4% 280 304 -7.9%
Flat-rolled products 172 143 19.7% 483 269 79.6%
Tubular products 96 69 38.0% 242 410 -41.0%
----------------------------------- ------- ------- ------------------ ------- ------- -------------------------
In Q3 2021, EVRAZ Regina's crude steel production increased by
5.7% QoQ, mainly because market demand remained high. Part of the
increase was caused by a low-base effect following the planned
maintenance outage in Q2 2021.
EVRAZ Pueblo's crude steel production increased by 38.6% QoQ as
operations resumed from the unplanned downtime in June.
Sales of construction products dropped by 23.3% QoQ because of
steel flow constraints following the unplanned downtime in
steelmaking in Q2 2021.
Sales of flat-rolled and tubular products rose by 19.7% and
38.0% QoQ respectively, primarily because of the continued increase
in market demand.
Average selling prices
US$/tonne (ex-works) Q3 Q2 9m 9m
2021 2021 2021 2020
----------------------- ------- ------- ------- -------
Construction products 1,015 900 911 660
Flat-rolled products 1,470 1,205 1,182 765
Tubular products 1,775 1,513 1,611 1,354
----------------------- ------- ------- ------- -------
In Q4 2021, steel production and sales volumes are forecasted to
be flat QoQ as market sentiments remain strong in the product
segments served by EVRAZ.
COAL SEGMENT
Production volumes
Product, '000 tonnes* Q3 Q2 Q3 2021/ Q2 2021, change 9m 9m 9m 2021/ 9m 2020, change
2021 2021 2021 2020
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Raw coking coal (mined) 4,983 5,098 -2.3% 16,573 14,632 13.3%
Coking coal concentrate
(production) 3,380 3,380 0.0% 10,629 9,983 6.5%
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
* Starting from 2021 Raspadskaya incl. Yuzhkuzbassugol and
Mezhegeyugol, the data ha s been adjusted
In Q3 2021, overall raw coking coal output fell by 2.3% QoQ. The
reduction was caused by scheduled longwall movements at the
Osinnikovskaya, Yerunakovskaya-8, Uskovskaya and Raspadskaya mines.
In addition, the Raspadskaya-Koksovaya mine had to temporarily slow
its operations because of difficult geological conditions. Output
from the remaining assets increased during the quarter.
Output of coking coal concentrate remained flat QoQ during the
reporting period.
Sales volumes
Product, '000 tonnes Q3 Q2 Q3 2021/ Q2 2021, change 9m 9m 9m 2021/ 9m 2020, change
2021 2021 2021 2020
--------------------------- ------- ------- ------------------------- ------- ------- -------------------------
External sales 2,462 2,761 -10.8% 8,047 9,539 -15.6%
Raw coking coal 104 299 -65.3% 541 2,021 -73.2%
Coking coal concentrate 2,358 2,462 -4.2% 7,505 7,518 -0.2%
Intersegment sales 1,533 1,682 -8.9% 4,755 5,327 -10.7%
Raw coking coal 522 647 -19.3% 1,666 1,826 -8.8%
Coking coal concentrate 1,010 1,035 -2.3% 3,089 3,501 -11.8%
--------------------------- ------- ------- ------------------------- ------- ------- -------------------------
External sales volumes of coking coal products declined by 10.8%
QoQ following lower sales of raw coking coal amid change in the
product mix in favour of coking coal concentrate to meet customer
needs.
Shipments of coking coal concentrate were affected by a partial
shortage of coal amid a large number of longwall movements at the
Group's mines during the quarter. In addition, increased logistic
burdens caused local disruptions in railcar and transport
availability, which also limited shipments compared to the previous
quarter.
Intersegment sales volumes of coking coal products fell by 8.9%
QoQ, mainly because of the decrease in the supply of K-grade and
KS-grade coal amid lower production volumes.
Sales of raw coking coal for 9m 2021 plunged by 73.2% YoY
because of a high-base effect after the management's decision to
sell off stockpiled materials in 2020 with the aim of lifting sales
amid the prevailing downward trend in global coal prices and
uncertainty caused by COVID-19 at the time.
Cash cost, US$/t Q3 Q2 Q3 2021/ Q2 2021, change 9m 9m 9m 2021/ 9m 2020, change
2021 2021 2021 2020
------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Coking coal concentrate 48 37 29.7% 40 33 21.2%
------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Note: Starting from 2021, the methodology has been changed.
Average selling prices
Q3 Q2 9m 9m
US$/tonne (ex-works) 2021 2021 2021 2020
------------------------- ------- ------- ------- -------
Raw coking coal 97 59 67 34
Coking coal concentrate 131 86 94 64
------------------------- ------- ------- ------- -------
In Q4 2021, raw coal production is expected to increase QoQ,
mainly because of the stabilisation of production volumes at the
Alardinskaya and Raspadskaya mines, the completion of longwall
movements at the Osinnikovskaya and Yerunakovskaya-8 mines, and the
launch of new equipment at the Raspadskaya-Koksovaya open-pit
mine.
Notes:
Semi-finished products include slabs, billets, pipe blanks and
other semi-finished products.
Construction products include beams, channels, angles, rebars,
wire rods, wire and other construction products.
Railway products include rails, wheels, tyres and other railway
products.
Flat-rolled products include commodity plate, specialty plate
and other flat products.
Tubular products include large-diameter line pipes, ERW pipes
and casings, seamless pipes and other tubular products.
Other steel products include rounds, grinding balls, mine
uprights, strips, etc.
###
For further information:
Media Relations:
+7 495 937 6871
+44-207-290-1096
media@evraz.com
Investor Relations:
+7 495 232 1370
+44-207-290-1095
ir@evraz.com
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