Severstal reports Q3 & 9M 2020 operational results

Severstal announces its operational results for Q3 & 9M 2020.

Q3 2020 GROUP HIGHLIGHTS

• Hot metal output increased 3% q/q in Q3 2020 to 2.40 mln tonnes (Q2 2020: 2.33 mln tonnes) following the completion of maintenance works at blast furnace facilities in the previous quarter. Crude steel production increased by 3% to 2.89 mln tonnes (Q2 2020: 2.81 mln tonnes), supported by growth in hot metal output.
• Consolidated sales of steel products increased 18% q/q to 3.01 mln tonnes in Q3 2020 (Q2 2020: 2.55 mln tonnes) reflecting production growth, a lower share of export shipments with a longer realisation period vs the previous quarter and finished goods stock reduction.
• The Company increased its share of domestic steel shipments to 63% (Q2 2020: 56%) in response to a demand recovery in Russia in Q3 2020.
• The share of high value-added (HVA) products within the sales portfolio amounted to 49% (Q2 2020: 43%) as a result of delayed demand for HVA products, and the Company reduced HVA finished goods stock levels q/q.
• Sales volumes of coking coal concentrate from Vorkutaugol declined 5% q/q to 1.22 mln tonnes as a result of lower concentrate output and a lower run-of-mine (ROM-rate) at the Zapolyarnaya mine.
• Sales volumes of iron ore pellets increased by 3% to 2.61 mln tonnes (Q2 2020: 2.53 mln tonnes) on the back of iron ore pellet production growth and inventory sell-off q/q.
• Sales volumes of iron ore concentrate grew by 3% to 1.96 mln tonnes (Q2 2020: 1.90 mln tonnes), primarily driven by higher output at Karelsky Okatysh and Olcon.

9M 2020 GROUP HIGHLIGHTS

• Hot metal output remained flat y/y in 9M 2020 at 7.14 mln tonnes (9M 2019: 7.13 mln tonnes). Production of crude steel decreased to 8.55 mln tonnes (9M 2019: 9.13 mln tonnes) due to lower production volumes of EAF steel following the disposal of Balakovo mini-mill in July 2019.
• The share of HVA products remained stable y/y at 45% in 9M 2020. The share of domestic shipments in 2020 was 58%, which is lower than in 2019 (9M 2019: 67%). This is a result of a deceleration in domestic demand in 2020 after achieving peak levels in the previous year and the disposal of the Balakovo mini-mill, which primarily served domestic markets.
• The average steel selling prices for 9M 2020 declined from 10% to 19% across the product range, as a result of adverse pricing dynamics of global benchmarks y/y.
• Iron ore concentrate sales volumes grew 14% y/y to 5.33 mln tonnes (9M 2019: 4.66 mln tonnes) driven by output growth at Karelsky Okatysh and the Yakovlevskiy mine y/y. The Company expects to achieve total production of around 2mt of iron ore concentrate at the Yakovlevskiy mine in FY2020.
• Coking coal concentrate sales volumes from Vorkutaugol increased 3% y/y.