OREANDA-NEWS. Cast iron output MMK Group’s Steel Segment in Q2 2015 increased by 9.4% q-o-q to 2,578 thousand tonnes. This was due to the completion of capital repairs to BF #8 followed by its commissioning in March.

Crude steel output in Q2 2015 decreased by 8.0% q-o-q to 2,969 thousand tonnes. This was due to reduced utilisation of arc-furnace capacities.

In Q2 2015, shipments of finished products totalled 2,677 thousand tonnes, down 5.8% q-oq. This decline was due to the overall deceleration of business activity amid the current economic situation, as well as falling domestic demand for steel following the completion of traders' restocking process.

Weakening domestic demand resulted in sales in Russia and the CIS in Q2 2015 contracting by 254 thousand tonnes or 11.6% q-o-q.

The Company compensated for this decline in domestic sales by increasing export shipments, which resulted in a growth in export share from 22.7% in Q1 2015 to 27.4% in Q2 2015. ? Following the completion of the traders' restocking process, seen in early Q1 2015, sales of long products decreased in Q2 2015 by 12.6% to 385 thousand tonnes.

An increase in export sales (including to MMK Metalurji) made it possible to maintain the volume of hot-rolled product sales in Q2 2015 nearly flat q-o-q.

The delay in seasonal domestic demand recovery, atypical for this period, resulted in a drop in HVA product sales in Q2 2015 by 9.2% q-o-q, and in a slight decline in HVA products' share in MMK's overall sales volume.

However, in Q2 2015, MMK Group managed to increase the share of HVA products in its overall sales volume to 48.3% (Q1 2015: 46.3%) thanks to increasing sales of MMK Metalurji products, as well as maintaining the sales volume of ММК Metiz products.

The best sales growth dynamics in Q2 2015 was demonstrated by the mill 5000's thick plate. Shipments volume in Q2 2015 increased by 26 thousand tonnes or 9.8% q-o-q. The mill's product shipments in H1 2015 increased by 141 thousand tonnes or 34.2% y-o-y. The key growth factor was the increasing volume of orders for thick plate for the production of largediameter pipes. Key consumers of these products included plants supplying pipes for the implementation of projects such as Power of Siberia and Southern Corridor.

Prices for mill 5000 products in dollar terms also grew faster than the average sales price for the whole production mix. In Q2 2015, prices for thick plate grew 47.2% q-o-q, while in H1 2015 the price increased by 12.6% y-o-y. The key factor in this price growth was the changed sales production mix reflecting an increased share of complex and high-density steel grades.

Sales of coated products declined faster than overall shipments due to weakening domestic demand for construction products in Q2 2015 following completion of traders' restocking process in Q1 2015 and abnormally high Q1 2015 base, when customers were actively increasing their stocks in the environment of growing domestic rouble prices.

Average sales price in dollar terms in Q2 2015 grew 12.9% q-o-q. This growth was mostly due to domestic prices reaching export parity level in late Q1 2015, the rouble strengthening during Q2 2015, and the remaining high share of HVA products in the sales mix (while prices for HVA products grew faster than for ordinary products).

Finished goods production by MMK Metiz in Q2 2015 amounted to 100 thousand tonnes (including 99 thousand tonnes produced from MMK steel), down 4.0 q-o-q. The company's results were under pressure of weakening demand for construction products.