Severstal reports Q2 & H1 2020 operational results

Severstal announces its operational results for Q2 & H1 2020.

Q2 2020 GROUP HIGHLIGHTS

Hot metal output decreased 3% q/q to 2.33 mln tonnes in Q2 2020 (Q1 2020: 2.41 mln tonnes) due to maintenance works at BF#1, #4 and #5.

Crude steel production decreased 2% q/q to 2.81 mln tonnes in Q2 2020 (Q1 2020: 2.85 mln tonnes) as a result of the decline in hot metal output.

Consolidated steel product sales decreased 7% q/q to 2.55 mln tonnes in Q2 2020 (Q1 2020: 2.75 mln tonnes) reflecting lower crude steel production and a higher portion of export sales, which have a longer realisation period. In addition the Company increased stock of finished goods at the end of the quarter.

The share of steel export shipments remained high at 44% (Q1 2020: 45%) in response to a slowdown in domestic demand caused by lockdown measures implemented in Russia.
The share of high value-added (HVA) products within the sales portfolio amounted to 43% in Q2 2020 (Q1 2020: 42%), reflecting a higher level of colour coated shipments and lower sales of semi-finished products and hot rolled coil.

Coking coal concentrate sales volumes from Vorkutaugol increased 34% q/q to 1.28 mln tonnes in Q2 2020 as a result of planned production growth.

Iron ore pellet sales decreased 15% to 2.53 mln tonnes (Q1 2020: 2.97 mln tonnes). In response to weaker pricing dynamics for pellets in Q2 2020, Karelsky Okatysh reallocated a portion of its volumes into iron ore concentrate, achieving a higher rate of end-to-end efficiency of internal consumption at CherMK.

Iron ore concentrate sales volumes increased 30% q/q to 1.90 mln tonnes (Q1 2020: 1.47 mln tonnes) driven by production growth at Karelsky Okatysh, and a recovery in production levels following a planned decline in Q1 at Olcon.

H1 2020 GROUP HIGHLIGHTS

Hot metal output increased 2% y/y in H1 2020 to 4.74 mln tonnes (H1 2019: 4.67 mln tonnes) driven by reduced maintenance downtime and higher energy efficiency rates. Crude steel production decreased to 5.66 mln tonnes (H1 2019: 6.10 mln tonnes) following the sale of the Balakovo mini-mill in 2019.

Iron ore concentrate sales volumes increased 24% y/y to 3.37 mln tonnes (H1 2019: 2.73 mln tonnes) primarily reflecting the ramp-up of the Yakovlevskiy mine and higher production levels at Karelsky Okatysh.
Coking coal concentrate sales volumes from Vorkutaugol increased 12% y/y driven by planned production growth.

The share of HVA products in the sales mix declined 2 ppts to 43% in H1 2020 reflecting higher sales volumes of semi-finished products and hot rolled coil.

The average steel selling prices for H1 2020 declined from 9% to 23% across the product range reflecting global benchmark dynamics.