Metinvest announces 1q 2015 operational results
OREANDA-NEWS. Metinvest B.V., the parent company of a vertically integrated group of steel and mining companies (jointly referred to as “Metinvest” or “the Group”), today announces its operational results for the first quarter ended 31 March 2015.
OPERATIONAL HIGHLIGHTS
|
('000 tonnes) |
1Q 2015 |
4Q 2014 |
? '000 t |
? % |
1Q 2015 |
1Q 2014 |
? '000 t |
? % |
|
Crude steel |
1,672 |
1,750 |
-78 |
-4% |
1,672 |
2,755 |
-1,083 |
-39% |
|
Iron ore concentrate (total) |
7,449 |
8,436 |
-987 |
-12% |
7,449 |
8,820 |
-1,371 |
-16% |
|
Coal concentrate (total) |
846 |
782 |
64 |
8% |
846 |
1,234 |
-388 |
-31% |
METALLURGICAL DIVISION
Hot metal production decreased by 2% q-o-q in 1Q 2015 as output fell by 42 thousand tonnes at Azovstal and 39 thousand tonnes at Yenakiieve Steel and increased by 36 thousand tonnes at Ilyich Steel. The fall at Azovstal was due to unstable supplies of raw materials as a result of the conflict in Eastern Ukraine. The drop at Yenakiieve Steel was due to the plant’s complete shutdown from 7 February to 16 March 2015.
Given the lower hot metal output, crude steel production dropped by 4% q-o-q in 1Q 2015. Volumes fell by 41 thousand tonnes at Azovstal and 42 thousand tonnes at Yenakiieve Steel, while there was a minor increase of 5 thousand tonnes at Ilyich Steel. This was less than the rise in hot metal output at the plant due to the hot metal’s reallocation to merchant pig iron production.
Hot metal production
|
('000 tonnes) |
1Q 2015 |
4Q 2014 |
? '000 t |
? % |
1Q 2015 |
1Q 2014 |
? '000 t |
? % |
|
Hot metal |
1,758 |
1,803 |
-45 |
-2% |
1,758 |
2,796 |
-1,038 |
-37% |
|
Azovstal |
705 |
747 |
-42 |
-6% |
705 |
838 |
-133 |
-16% |
|
Ilyich Steel |
821 |
785 |
36 |
5% |
821 |
1,279 |
-458 |
-36% |
|
Yenakiieve Steel |
232 |
271 |
-39 |
-14% |
232 |
679 |
-447 |
-66% |
Crude steel production
|
('000 tonnes) |
1Q 2015 |
4Q 2014 |
? '000 t |
? % |
1Q 2015 |
1Q 2014 |
? '000 t |
? % |
|
Crude steel |
1,672 |
1,750 |
-78 |
-4% |
1,672 |
2,755 |
-1,083 |
-39% |
|
Azovstal |
818 |
859 |
-41 |
-5% |
818 |
920 |
-102 |
-11% |
|
Ilyich Steel |
592 |
587 |
5 |
1% |
592 |
1,069 |
-477 |
-45% |
|
Yenakiieve Steel |
262 |
304 |
-42 |
-14% |
262 |
766 |
-504 |
-66% |
In 1Q 2015, hot metal output fell by 37% y-o-y as production slumped due to the conflict in Eastern Ukraine that began in the second half of 2014. Driving the decline was the complete shutdown of Yenakiieve Steel from 7 February to 16 March 2015 and constraints in raw-material supplies to Azovstal and Ilyich Steel in 1Q 2015. Output fell by 133 thousand tonnes at Azovstal, 458 thousand tonnes at Ilyich Steel and 447 thousand tonnes at Yenakiieve Steel.
The decline in hot metal output caused a comparable decrease in crude steel production, which dropped by 39% y-o-y. Output volumes fell by 102 thousand tonnes at Azovstal, 477 thousand tonnes at Ilyich Steel, and 504 thousand tonnes at Yenakiieve Steel.
|
('000 tonnes) |
1Q 2015 |
4Q 2014 |
? '000 t |
? % |
1Q 2015 |
1Q 2014 |
? '000 t |
? % |
|
Pig iron |
289 |
263 |
26 |
10% |
289 |
367 |
-78 |
-21% |
|
Semi-finished products |
312 |
336 |
-24 |
-7% |
312 |
595 |
-283 |
-48% |
|
Slab |
172 |
210 |
-38 |
-18% |
172 |
272 |
-100 |
-37% |
|
Square billets |
140 |
126 |
14 |
11% |
140 |
323 |
-183 |
-57% |
|
Finished products |
1,247 |
1,269 |
-22 |
-2% |
1,247 |
1,986 |
-739 |
-37% |
|
Flat products |
983 |
884 |
99 |
11% |
983 |
1,335 |
-352 |
-26% |
|
Long products |
219 |
289 |
-70 |
-24% |
219 |
559 |
-340 |
-61% |
|
Rail products |
6 |
6 |
0 |
0% |
6 |
56 |
-50 |
-89% |
|
Tubular products |
39 |
90 |
-51 |
-57% |
39 |
36 |
3 |
8% |
|
Large-diameter pipes |
32 |
77 |
-45 |
-58% |
32 |
25 |
7 |
28% |
|
Other pipes |
7 |
13 |
-6 |
-46% |
7 |
11 |
-4 |
-36% |
|
TOTAL |
1,848 |
1,868 |
-20 |
-1% |
1,848 |
2,948 |
-1,100 |
-37% |
The greater hot metal output at Ilyich Steel in 1Q 2015 caused an increase in merchant pig iron production of 26 thousand tonnes q-o-q.
In 1Q 2015, merchant pig iron output fell by 78 thousand tonnes y-o-y, driven by the lower hot metal production.
In 1Q 2015, output of merchant semi-finished products decreased by 24 thousand tonnes q-o-q due to decreased production of slabs by 38 thousand tonnes and boosted output of square billets by 14 thousand tonnes. The reduced output of merchant slabs was due to less smelting of crude steel at Azovstal and the diversion of slabs to make flat products at Azovstal and Ilyich Steel. The greater production of square billets at Yenakiieve Steel was the result of additional downtime at the 150 and 390 rolling mills in the Makiivka branch of Yenakiieve Steel during the active phase of the conflict in Eastern Ukraine.
In 1Q 2015, merchant semi-finished products output decreased by 283 thousand tonnes y-o-y, as production of slabs fell by 100 thousand tonnes and square billets by 183 thousand tonnes amid the conflict.
Output of finished goods in 1Q 2015 fell by 22 thousand tonnes q-o-q.
Output of flat products increased by 99 thousand tonnes q-o-q in 1Q 2015, driven by orders for finished goods from Azovstal and Ilyich Steel, while output at the re-rolling plants in the EU remained the same q-o-q.
Output of long products decreased by 70 thousand tonnes q-o-q, driven by three factors. First, output fell by 42 thousand tonnes following the shutdown of the Makiivka branch of Yenakiieve Steel (the 150 mill was idle from 10 February to 9 April and the 390 mill from 8 February to 1 April), due to repairs to eliminate damage caused by artillery shelling. Second, production declined by 42 thousand tonnes at Azovstal amid lower orders in Ukraine and Russia. Third, output increased by 14 thousand tonnes at Promet Steel in Bulgaria, partly offsetting the lost production at the Ukrainian assets.
Output of tubular products decreased by 51 thousand tonnes, of which large-diameter pipe production at Khartsyzsk Pipe fell by 45 thousand tonnes due to constrained supplies of coating materials for tubes and finished goods shipments amid the conflict in the region.
Production of finished goods fell by 739 thousand tonnes y-o-y in 1Q 2015, a continuation of the decline that began in the second half of 2014 due to the conflict:
- flat product output shrank by 352 thousand tonnes, mainly due to decreases in the output of plate by 265 thousand tonnes and coil by 94 thousand tonnes at Ilyich Steel , as well as a rise in production by 9 thousand tonnes overall at the European assets
- long product output shrank by 340 thousand tonnes due to the shutdown of crude steel production at Yenakiieve Steel and the additional shutdown of the Makiivka branch of Yenakiieve Steel during the active phase of the conflict in 2015 (228 thousand tonnes) and a lack of orders at Azovstal (57 thousand tonnes). Long product output fell by 55 thousand tonnes at Promet Steel, amid a shortage in billets due to the shutdown of Yenakiieve Steel in February-March 2015
- rail product output dropped by 50 thousand tonnes at Azovstal due to decreased demand
Coke production
Coke output in 1Q 2015 decreased by 2% (22 thousand tonnes) q-o-q, as operations became unstable at Donetsk Coke and Avdiivka Coke, which are in the conflict zone and reduced production by 16 and 8 thousand tonnes, respectively. In addition, Zaporizhia Coke decreased production by 24 thousand tonnes due to repairs of core equipment. These losses were partly offset by an increase in coke output at Azovstal of 26 thousand tonnes, as coal supplies resumed.
Coke production in 1Q 2015 decreased by 598 thousand tonnes y-o-y. This was due to constraints in raw-material supplies and unstable operations at Avdiivka Coke, Azovstal and Donetsk Coke due to the conflict in Eastern Ukraine.
On average, the Group used around 73% of total coke output internally in 1Q 2015.
|
('000 tonnes) |
1Q 2015 |
4Q 2014 |
? '000 t |
? % |
1Q 2015 |
1Q 2014 |
? '000 t |
? % |
|
Coke production (total) |
879 |
901 |
-22 |
-2% |
879 |
1,477 |
-598 |
-40% |
|
236 |
260 |
-24 |
-9% |
236 |
283 |
-47 |
-17% |
MINING DIVISION
Iron ore concentrate and pellet output
The Group’s production of iron ore concentrate decreased by 12% q-o-q (987 thousand tonnes) in 1Q 2015. Output declined by 34 thousand tonnes at Central GOK, as capacity hours fell q-o-q, 361 thousand tonnes at Northern GOK and 593 thousand tonnes at Ingulets GOK. The main reasons were:
- lower internal iron ore consumption due to hot metal production decreases at the Group's steelmakers
- the redirection of volumes available to ports for sales to third parties
- the accumulation of surplus volumes of iron ore concentrate in ports and Group warehouses
|
('000 tonnes) |
1Q 2015 |
4Q 2014 |
? '000 t |
? % |
1Q 2015 |
1Q 2014 |
? '000 t |
? % |
|
Iron ore concentrate (total) |
7,449 |
8,436 |
-987 |
-12% |
7,449 |
8,820 |
-1,371 |
-16% |
|
4,791 |
5,778 |
-987 |
-12% |
4,791 |
5,322 |
-531 |
-10% |
|
|
Iron ore concentrate |
2,654 |
3,738 |
-1,084 |
-29% |
2,654 |
3,084 |
-430 |
-14% |
|
Pellets |
2,137 |
2,040 |
97 |
5% |
2,137 |
2,238 |
-101 |
-5% |
Output of merchant iron ore products dropped by 987 thousand tonnes q-o-q due to the following factors:
- merchant concentrate output declined by 1,084 thousand tonnes q-o-q, due to a fall in concentrate production (987 thousand tonnes) and a decrease in concentrate output in favour of pellets (97 thousand tonnes)
- merchant pellet output rose by 97 thousand tonnes, due to changes in the market situation.
In 1Q 2015, overall output of iron ore concentrate decreased by 1,371 thousand tonnes y-o-y. This was due to lower production caused by a rise in inventory levels, as product shipments were disrupted and intragroup consumption fell amid the conflict (Yenakiieve Steel was idle from 7 February to 16 March, while Ilyich Steel and Azovstal decreased hot metal production).
Production of merchant concentrate in 1Q 2015 totalled 2,654 thousand tonnes, down 430 thousand tonnes y-o-y. This was driven by a fall in merchant concentrate output of 484 thousand tonnes at Ingulets GOK, partly offset by an increase of 54 thousand tonnes overall at Northern GOK and Central GOK.
In 1Q 2015, merchant pellet output decreased by 101 thousand tonnes y-o-y. This was due to an overall decrease in concentrate output given the abovementioned factors.
Coal concentrate production
|
('000 tonnes) |
1Q 2015 |
4Q 2014 |
? '000 t |
? % |
1Q 2015 |
1Q 2014 |
? '000 t |
? % |
|
Coal concentrate (total) |
846 |
782 |
64 |
8% |
846 |
1,234 |
-388 |
-31% |
|
463 |
269 |
194 |
72% |
463 |
337 |
126 |
37% |
Coal concentrate output increased by 64 thousand tonnes q-o-q, as production increased by 94 thousand tonnes at United Coal and decreased by 30 thousand tonnes at Krasnodon Coal.
The fall in production at Krasnodon Coal was due to logistical constraints resulting from the conflict. The Molodogvardeiskaya mine was switched to a maintenance regime (reducing production by 13 thousand tonnes). The Samsonovskaya-Zapadnaya mine's output dropped by 23 thousand tonnes due to a halt at the production face (coal concentrate was extracted only from operational longwall faces). The Barakova mine's increase in output offset lost production insignificantly. United Coal’s increase in output was due to more hours worked.
Coal concentrate production in 1Q 2015 fell by 388 thousand tonnes y-o-y. This was caused by a fall in volume of 585 thousand tonnes at Krasnodon Coal, offset by an increase of 197 thousand tonnes at United Coal.
The greater production at United Coal was the result of:
- an increase in production of 119 thousand tonnes at the Affinity mine, which was idle during the same period of 2014
- a rise in output of 86 thousand tonnes at the Wellmore mines due to the launch of new coal mining capacity
- an increase in output of 79 thousand tonnes at the Carter Roag mines due to improved geological conditions
- a drop in output of 85 thousand tonnes at the Pocahontas mines as a result of downtime in 2015
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