OREANDA-NEWS. PAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world’s leading vertically integrated steel and steel-related mining companies, today announces its operational results for Q4 2015 and FY 2015.

Q4 2015 GROUP HIGHLIGHTS

  • Hot metal output remained largely unchanged q/q at 2.34 mln tonnes (Q3 2015: 2.31 mln tonnes).
  • Crude steel production decreased 5% q/q to 2.75 mln tonnes (Q3 2015: 2.89 mln tonnes), partially as a result of seasonally weaker demand for long steel products and lower output at Balakovo mini-mill, which remains in ramp-up mode. Crude steel output at Cherepovets Steel Mill was impacted by scheduled short-term maintenance of converter #1, continuous casters #4 and #5 and the billet caster.
  • In addition, an 88% q/q increase in semi-finished product sales contributed to substantially reducing inventory levels for semi-finished products.
  • Reflecting a seasonal softness in the domestic market, the share of domestic steel products sales volumes in the sales mix decreased marginally to 64% (Q3 2015: 67%). The domestic market, which offers higher sales margins, remains a priority for the Company.
  • Consolidated sales of steel products decreased 13% q/q to 2.62 mln tonnes (Q3 2015: 3.00 mln) on the back of seasonally weaker steel consumption in Russia’s construction sector. Meanwhile, despite the continuing slump in oil prices, healthy demand for steel products was maintained from the oil & gas sector.
  • The share of high value-added (HVA) products in the sales portfolio remained strong at 47% (Q3 2015: 47%) despite an 88% q/q increase in semi-finished product sales.
  • Coking coal concentrate sales volumes improved 1% q/q reflecting a substantial increase in ROM-coal output volumes in Q4 at Vorkutaugol following the completion of several scheduled long-wall repositionings at the beginning of the quarter.
  • Sales of iron ore concentrate decreased 15% q/q due to considerably lower external sales as a result of seasonally weaker demand. Meanwhile the company is producing captive iron ore concentrate efficiently  more thanks to a focus on steady cost improvement and stripping ratio reduction.
  • Ongoing concerns regarding the prospects of the Chinese economy and the potential slowdown of the US economy have put pressure on the global metals & mining sector. At the same time, steel overcapacity continues to influence global steel prices which remained in decline over the quarter. In the domestic market, USD-denominated prices started to decline, reflecting both the RUB devaluation and initiatives by Russian steel producers to cut local prices in response to seasonally weaker demand. Against this backdrop Severstal continues to demonstrate resilience thanks to a focus on cost efficiencies throughout the business, HVA products, improving customer care, and the geographical advantage of its assets for shifting sales between domestic and export markets.

SUMMARY OF KEY PRODUCTION, SALES VOLUMES AND SELLING PRICES DATA

Production, tonnes

Q4 2015

Q3 2015

Change, %

2015

2014

Change, %

Crude steel (Russian Steel)

2,750,898

2,893,026

(5%)

11,451,066

11,301,979

1%

Hot metal (Russian Steel)

2,335,698

2,313,103

1%

9,243,471

9,075,597

2%
             

Sales volumes, tonnes

Q4 2015

Q3 2015

Change, %

2015

2014

Change, %

Coking coal concentrate

1,475,919

1,458,964

1%

5,666,440

5,371,269

5%

Iron ore pellets

2,697,648

2,729,137

(1%)

10,603,728

10,617,584

(0%)

Iron ore concentrate

959,895

1,126,007

(15%)

4,142,906

4,429,995

(6%)

Total steel products (Consolidated)

2,619,351

3,001,339

(13%)

10,823,680

10,409,608

4%

Total steel products (Russian Steel)

2,631,266

3,012,818

(13%)

10,874,206

10,592,758

3%
             

Average price, $/tonne

Q4 2015

Q3 2015

Change, %

2015

2014

Change, %

Coking coal concentrate, Vorkutaugol

71

64

11%

73

89

(18%)

Iron ore pellets, Karelsky Okatysh

43

45

(4%)

48

80

(40%)

Iron ore concentrate, Olkon

31

30

3%

32

55

(42%)

Hot-rolled coil (RSD)

299

356

(16%)

364

486

(25%)

 

High value added steel products, %

Q4 2015

Q3 2015

Change, %

2015

2014

Change, %

Severstal (Consolidated)

47%

47%

0 ppts

47%

50%

(3 ppts)

Severstal Russian Steel

47%

47%

0 ppts

47%

49%

(2 ppts)

SEVERSTAL’S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)

Sales volumes, tonnes

Q4 2015

Q3 2015

Change, %

2015

2014

Change, %

Coal:

1,221,429

1,009,796

21%

3,945,184

3,354,501

18%

Coking coal concentrate

544,058

431,248

26%

1,802,359

1,639,609

10%

Raw coking coal

-

-

n.a.

8,719

57,999

(85%)

Steam coal

677,371

578,548

17%

2,134,106

1,656,893

29%

Iron ore:

1,520,891

1,687,523

(10%)

6,185,003

6,041,521

2%

Iron ore pellets

1,495,833

1,515,515

(1%)

5,803,962

5,884,802

(1%)

Iron ore concentrate

25,058

172,008

(85%)

381,041

156,719

143%

Semi-finished products

191,711

102,049

88%

488,802

373,491

31%

Rolled products:

1,963,490

2,365,752

(17%)

8,347,212

8,137,441

3%

Hot-rolled coil

933,573

1,108,748

(16%)

3,988,155

3,661,481

9%

Hot-rolled plate

193,762

164,622

18%

712,760

840,116

(15%)

Cold-rolled coil

329,430

367,717

(10%)

1,335,961

1,442,704

(7%)

Galvanised and metallic coated coil

147,797

201,559

(27%)

624,193

591,856

5%

Color coated coil

100,747

146,883

(31%)

417,450

433,797

(4%)

Long products

258,181

376,223

(31%)

1,268,693

1,167,487

9%

Downstream products:

464,150

533,538

(13%)

1,987,666

1,898,676

5%

Metalware products

147,682

170,281

(13%)

609,652

636,332

(4%)

Large diameter pipes

129,491

130,653

(1%)

547,755

400,153

37%

Other tubes, pipes, formed shapes

186,977

232,604

(20%)

830,259

862,191

(4%)