OREANDA-NEWS. Metalloinvest, a leading global iron ore and HBI producer and one of the regional steel producers, announces its operational results for the fourth quarter and full year 2013.

The Company's production and shipments in 2013 reflect the market conditions. The increase in HBI/DRI production by 3.1 % and shipments by 6.7% y-o-y correspond to Metalloinvest's strategy to increase the share of high value-added products.

Management comments

In Q4 2013, the Company increased iron ore production1 by 0.8% q-o-q2 to 9.6 mn tonnes. Overall, 2013 production amounted to 38.4 mn tonnes, down 3.5% y-o-y

Pellet production in Q4 2013 was 5.7 mn tonnes, equal to Q3 2013. As a result, pellet production in 2013 remained at the level of 22.6 mn tonnes

In Q4 2013, the Company increased HBI/DRI production by 6.7% q-o-q to 1.4 mn tonnes. This resulted in annual output rising to 5.3 mn tonnes, an increase of 3.1% y-o-y

In Q4 2013, the Company increased shipments of iron ore products to the domestic market to 4.2 mn tonnes, up 11.1% q-o-q. Overall, 2013 shipments to Russia and the CIS amounted to 16.3 mn tonnes, representing 60% of the Company's consolidated shipments of iron ore products, mainly due to increased supplies to MMK and Severstal

Shipments to Europe remained flat at 1.6 mn tonnes in Q4 2013. Thus, by the end of 2013, shipments decreased by 17.6% y-o-y to 5.4 mn tonnes, representing 20% of the Company's consolidated shipments of iron ore products

Due to increased shipments to the domestic market under long-term contracts, the Company's shipments to China decreased to 0.2 mn tonnes in Q4 2013 and totalled 2.2 mn tonnes in 2013, representing 8% of the Company's consolidated shipments of iron ore products

Mining Segment

In Q4 2013, LGOK increased iron ore concentrate production by 3.0% q-o-q to 5.1 mn tonnes. Overall, 2013 concentrate production decreased by 4.5% y-o-y to 20.3 mn tonnes, due to changes in the plan of mining operations, partial replacement of railway tracks in the open pit, as well as realisation of maintenance works at the Beneficiation Plant

MGOK decreased iron ore concentrate production by 1.6% q-o-q to 4.1 mn tonnes in Q4 2013, mainly due to a planned increase in maintenance time of the crushing and processing plant. Concentrate production in 2013 decreased by 2.3% y-o-y to 16.6 mn tonnes, mainly due to changes in the structure of mining transport operations

In Q4 2013, pellet production at LGOK amounted to 2.2 mn tonnes, representing a decline of 2.0% q-o-q as a result of major maintenance works at Pellet Plant #1. Overall, 2013 pellet production increased by 1.3% y-o-y to 8.9 mn tonnes, mainly due to the optimisation of maintenance works

MGOK increased pellet production in Q4 2013 by 5.6% q-o-q to 2.6 mn tonnes, mainly due to the reduction of maintenance time. Overall, 2013 pellet production decreased by 2.5% y-o-y to 9.9 mn tonnes as a result of planned major maintenance works at Pellet Plant #1 in Q2 2013

HBI production in Q4 2013 decreased by 4.9% q-o-q to 0.6 mn tonnes, due to planned major maintenance works at the HBI-2 Plant. Overall in 2013, LGOK increased HBI production by 7.1% y-o-y to 2.6 mn tonnes, resulting from HBI-2 Plant's modernisation together with the increase in productivity of the unit in Q4 2012

Steel Segment

In Q4 2013, OEMK decreased pellet production by 9.9% q-o-q due to planned major maintenance works at the pellet plant. Overall in 2013, OEMK increased pellet production by 1.8% y-o-y to 3.8 mn tonnes due to a reduction in maintenance time y-o-y

OEMK increased DRI production in Q4 2013 by 18.1% q-o-q to 0.8 mn tonnes after the completion of major maintenance works at DRI plants #3 and #4 in Q3 2013. Overall, 2013 DRI production amounted to 2.8 mn tonnes and remained at the level of 2012

Crude steel production at OEMK amounted to 0.8 mn tonnes in Q4 2013 (up 11.3% q-o-q). Overall, 2013 crude steel production at OEMK decreased by 2.2% y-o-y to 3.2 mn tonnes

Ural Steel decreased crude steel production in Q4 2013 by 7.6% q-o-q to 0.3 mn tonnes, mainly as a result of major maintenance works to the continuous casting machine. Overall, 2013 crude steel production decreased by 37.1% y-o-y to 1.5 mn tonnes, due to the closure of the open-hearth plant from Q2 2013 onwards and a decline in the volume of effective orders

In Q4 2013, Ural Steel increased hot metal production by 3.6% q-o-q to 0.6 mn tonnes, mainly due to the increased productivity of the blast furnace shop. Overall, 2013 shipments of merchant pig iron increased by 74.4% y-o-y to 1.4 mn tonnes due to the modernisation of hot metal production capacities and favourable conditions on the pig iron market