EVRAZ Q4 2020 TRADING UPDATE - CORRECTION

RNS Number : 3468N
Evraz Plc
29 January 2021
 

This announcement replaces the RNS announcement number 2820N released at 07:00 UK time today,
29 January 2021.

The figures in the section "   Q4 2020 vs Q3 2020 HIGHLIGHTS" in the "Coking coal concentrate production" bullet point on page 1 of the pdf version should read as follows:

· Coking coal concentrate production grew by 5.6% QoQ, mainly due to increased coal mining volumes

 

 

29 January 2021 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group") today released its trading update for the fourth quarter and full year 2020.

Q4 2020 vs Q3 2020 HIGHLIGHTS

· In Q4 2020, EVRAZ' consolidated crude steel output rose by 7.4% QoQ, mainly due to higher production volumes at EVRAZ NTMK following the completion of scheduled capital repairs during Q3 2020, as well as improved production volumes at EVRAZ North America, which grew by 26.6% QoQ.

· Total sales of steel products increased by 12.0% QoQ, driven primarily by sales of semi-finished products, which grew by 30.4%. This, in turn, was mainly the result of a recovery in export markets and weaker demand for finished construction products in Russia due to seasonal factors.

· Total raw coking coal production rose by 26.1% QoQ, driven by the relaunch of production at the Razrez Raspadsky open pit as well as better production volumes at the Raspadskaya mine.

· Coking coal concentrate production grew by 5.6% QoQ, mainly due to increased coal mining volumes.

· External sales volumes of coking coal products fell by 19.2% QoQ, due to a deficit of GZh grade coal amid longwall move at the Uskovskaya mine as well as elevated levels of Q2-Q3 2020 sales amid utilisation of stockpiles.

· External sales of iron ore products decreased by 8.4% QoQ, amid higher consumption of pellets by EVRAZ NTMK following the successful launch of blast furnace no. 6 in Q3 2020.

· Sales of vanadium products rose by 51.4% QoQ, mainly due to higher steel utilisation rates, following increased FeV demand also from the automotive industry as well as some increase of oxide and FeV sales to China during Q4 2020.

FY2020 vs FY2019 HIGHLIGHTS

· In 2020, EVRAZ' consolidated crude steel production remained almost flat YoY (-1.3%), despite challenges created by the COVID-19 pandemic. In addition, turbulence in the oil and gas markets led to lower demand, resulting in decrease of production volumes at EVRAZ North America.

· Sales volumes of semi-finished products increased by 6.1% YoY, primarily due to a change in the product mix in favour of higher slab and billets sales to export destinations following a decrease in demand in Russia during the COVID-19 pandemic.

· Sales of finished products declined by 10.1%, mainly attributable to the sale of Palini e Bertoli in 2019, as well as lower tubular and flat-rolled products sales at EVRAZ North America, amid unfavourable market conditions caused by the COVID-19 pandemic.

· Production of raw coking coal fell by 21.0% YoY, due to a halt in mining at the Razrez Raspadsky open pit from May to September 2020, the idling of the Mezhegeyugol mine from March 2020 and lower production volumes at the Raspadskaya mine due to challenging geological conditions.

· External iron ore product sales rose by 52.7% YoY, primarily as a result of higher shipments to external markets amid lower consumption of pellets by EVRAZ NTMK during a major overhaul of blast furnace no.6, which was successfully launched in Q3 2020.

· Sales of final vanadium products declined by 2.2% YoY, mainly due to reduced global FeV demand, following the imposition of COVID-19 restrictions (which were partially compensated by changing the regional sales and product mix to serve the more active Chinese oxide market during 2020).

Product, '000 tonnes

Q4
2020

Q3
2020

Q4 2020/ Q3 2020, change

12m
 2020

12m
2019

12m 2020/ 12m 2019, change

Total crude steel production

3,467

3,227

7.4%

13,630

13,814

-1.3%

Russia

3,044

2,893

5.2%

12,050

11,953

0.8%

North America

423

334

26.6%

1,580

1,861

-15.1%

Total raw coking coal mined

6,021

4,775

26.1%

20,653

26,140

-21.0%

Total coking coal concentrate
production

4,088

3,873

5.6%

15,528

15,922

-2.5%

Iron ore products production

3,642

3,508

3.8%

14,205

13,765

3.2%

Total sales of steel products

3,410

3,046

12.0%

13,062

13,479

-3.1%

  Semi-finished products

1,707

1,309

30.4%

6,183

5,828

6.1%

  Finished products

1,703

1,737

-1.9%

6,879

7,651

-10.1%

Total sales of third-party steel products

209

267

-21.7%

848

801

5.9%

Sales of coking coal products

2,797

3,460

-19.2%

12,336

11,053

11.6%

Sales of iron ore products

445

486

-8.4%

1,732

1,134

52.7%

Sales of vanadium in slag

1,763

1,605

9.8%

6,129

6,451

-5.0%

Sales of vanadium final products 1

4,207

2,779

51.4%

12,604

12,883

-2.2%

Note. Numbers in this table and the tables below may not add up to totals due to rounding.

1 In tonnes of pure vanadium

 



 

STEEL SEGMENT

Total production volumes

Product, '000 tonnes

Q4 2020

Q3 2020

Q4 2020/ Q3 2020, change

12m 2020

12m 2019

12m 2020/ 12m 2019, change

Pig iron production

2,851

2,686

6.1%

11,157

11,016

1.3%

EVRAZ ZSMK

1,564

1,556

0.5%

6,208

6,072

2.2%

EVRAZ NTMK

1,287

1,130

13.9%

4,949

4,944

0.1%

Crude steel production

3,044

2,893

5.2%

12,050

11,953

0.8%

EVRAZ ZSMK

1,933

1,880

2.8%

7,671

7,659

0.2%

EVRAZ NTMK

1,111

1,013

9.7%

4,379

4,294

2.0%

Total steel products production, net of re-rolled volume1

2,876

2,600

10.6%

11,082

11,018

0.6%

EVRAZ ZSMK

1,758

1,608

9.3%

6,766

6,817

-0.7%

EVRAZ NTMK

1,043

930

12.2%

3,999

3,590

11.4%

EVRAZ Caspian Steel

75

62

21.0%

317

283

12.0%

Iron ore products production

3,642

3,508

3.8%

14,205

13,765

3.2%

Pellets (EVRAZ KGOK)

1,660

1,607

3.3%

6,548

6,203

5.6%

Sinter (EVRAZ KGOK)

928

833

11.4%

3,582

3,511

2.0%

Concentrate saleable (EVRAZ KGOK, EVRAZ ZSMK)

1,054

1,068

-1.3%

4,075

4,051

0.6%

Coking coal concentrate production

473

475

-0.4%

1,930

1,947

-0.9%

From own raw coal2

371

317

17.0%

1,518

1,335

13.7%

From third-party raw coal

102

158

-35.4%

412

612

-32.7%

Gross vanadium slag production3

5,037

4,419

14.0%

19,533

18,380

6.3%

Note. Numbers in this table and the tables below may not add up to totals due to rounding.
1 Including EVRAZ Palini e Bertoli
2 From Coal segment
3 In tonnes of pure vanadium

In Q4 2020, pig iron production increased by 6.1% QoQ, as the capital repair of blast furnace no. 6 was completed in Q3 2020 at EVRAZ NTMK. In FY2020, EVRAZ` pig iron production remained almost flat YoY.

Crude steel production volumes rose by 5.2% QoQ, as scheduled capital repairs during Q3 2020 were completed. In FY2020, the production of crude steel remained almost flat YoY, which was in line with pig iron production volumes.

The total output of steel products increase by 10.6% QoQ, following the completion of scheduled capital repairs at EVRAZ ZSMK in Q3 2020 and a change in the product mix at EVRAZ NTMK. EVRAZ Caspian Steel increased production by 21.0% QoQ, due to higher market demand. In FY2020, the total output of steel products remained flat YoY. This was mainly due to a 11.4% YoY increase in production at EVRAZ NTMK, amid higher volumes of semi-finished and construction products, partly offset by the sale of Palini e Bertoli.

Output of iron ore products went up by 3.8% QoQ, as scheduled capital repairs at EVRAZ KGOK were completed in Q3 2020. In FY2020, output of iron ore products rose by 3.2% YoY, following higher consumption of pellets, lower unscheduled downtime and increased operational efficiency at EVRAZ KGOK.

Consolidated output of vanadium slag increased by 14.0% QoQ, due to higher volumes of pig iron duplex processing. In FY2020, output of vanadium slag climbed by 6.3% YoY, due to the higher vanadium content in pig iron.

 

Total sales volumes

Product, '000 tonnes

Q4 2020

Q3
2020

Q4 2020/ Q3 2020, change

12m
2020

12m
2019

12m 2020/ 12m 2019, change

Coke

74

130

-43.1%

390

361

8.0%

Steel products, external sales

3,046

2,703

12.7%

11,377

11,273

0.9%

Semi-finished products

1,707

1,309

30.4%

6,039

5,636

7.2%

  Slabs

849

436

94.7%

2,592

2,443

6.1%

  Billets

722

735

-1.8%

2,933

2,519

16.4%

  Other steel products1

136

138

-1.4%

514

674

-23.7%

Finished products

1,339

1,394

-3.9%

5,338

5,636

-5.3%

  Construction products

845

925

-8.6%

3,392

3,331

1.8%

  Railway products

320

310

3.2%

1,299

1,393

-6.7%

  Flat products

0

0

n/a

0

321

-100.0%

  Other steel products

174

159

9.4%

647

591

9.5%

Steel products, inter-segment sales

21

3

600.0%

67

318

-78.9%

Third-party steel products, external sales

209

267

-21.7%

848

801

5.9%

Iron ore products, external sales

445

486

-8.4%

1,732

1,134

52.7%

Pellets

445

486

-8.4%

1,732

1,134

52.7%

Sales of vanadium in slag

1,763

1,605

9.8%

6,129

6,451

-5.0%

Sales of vanadium final products2

4,207

51.4%

12,604

12,883

-2.2%

Note. Numbers in this table and the tables below may not add to totals due to rounding.

1 Includes tonnes of pig iron

2 In tonnes of pure vanadium

 

In Q4 2020, external sales of steel products rose by 12.7% QoQ. Sales of semi-finished products surged by 30.4% QoQ, driven by a recovery in export markets and weaker demand for finished construction products in Russia due to seasonal factors.  This resulted in a change in the sales mix in favour of semi-finished products.

 

In FY 2020, sales volumes of semi-finished products were up 7.2% YoY, primarily due to a change in the product mix in favour of higher slab and billets sales to export destinations following a decrease in demand in Russia amid the COVID-19 pandemic.

 

Sales of finished products dropped by 3.9% QoQ, due to a change in the product mix. In FY2020, sales volumes of finished products declined by 5.3% YoY, mainly due to the sale of Palini e Bertoli in 2019 and lower demand for railway products on the domestic market.

 

Sales of iron ore products fell by 8.4% QoQ, amid higher consumption of pellets by EVRAZ NTMK, following the successful launch of blast furnace no. 6 in Q3 2020. In FY2020, primarily as a result of higher shipments to external markets amid lower consumption of pellets by EVRAZ NTMK at the time of a major overhaul of blast furnace no.6 which was successfully launched in Q3 2020.

 

Sales of vanadium products rose by 51.4% QoQ, mainly due to higher steel utilisation rates, following increased FeV demand also from the automotive industry as well as some increase of oxide and FeV sales to China during Q4. In FY2020, sales of final vanadium products declined by 2.2% YoY, mainly due to reduced global FeV demand, following the imposition of COVID-19 restrictions.

Cash cost, US$/t

Q4

2020

Q3

2020

Q4 2020 / Q3 2020, change

 12m

2020

 12m

2019

12m 2020 / 12m 2019, change

Slab cash cost vertically integrated

224 

200

12.0%

213 

236

-9.7%

Iron ore products (Fe 62%)

37 

35

5.7%

36 

41

-12.2%

 

Average selling prices

US$/tonne (ex-works)

Q4

2020

Q3

2020

12m

2020

12m

2019

Coke

177

135

155

217

Steel products

455

435

442

483

Semi-finished products1

374

315

333

361

Construction products

494

473

479

534

Railway products

732

796

818

823

Other steel products

516

477

498

576

Pellets

78

61

60

70

Metal Bulletin Ferro-Vanadium basis 78% min, free DDP, consumer plant, 1st grade Western Europe2

24.38

24.23

25.02

41.62

Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid2

23.11

21.81

23.85

49.18

1 Includes prices for pig iron

2 US$/kgV

 

In Q1 2021, pig iron production volumes are expected to decrease slightly as a result of fewer operational days in Q1 2021. Iron ore pellets and sinter production volumes are expected to remain flat.

STEEL, NORTH AMERICA SEGMENT

 

Production and sales volumes

Product, '000 tonnes

Q4

2020

Q3 2020

Q4 2020/

Q3 2020, change

12m 2020

12m

2019

12m 2020/ 12m 2019, change

Crude steel

423

334

26.6%

1,580

1,861

-15.1%

EVRAZ US mills

196

181

8.3%

838

925

-9.4%

EVRAZ Canadian mills

227

153

48.4%

743

936

-20.6%

Total steel products production, net of re-rolled volume

377

377

0.0%

1,668

2,212

-24.6%

EVRAZ US mills

270

257

4.8%

1,125

1,418

-20.7%

EVRAZ Canadian mills

107

119

-10.4%

542

794

-31.7%

Sales of steel products

364

343

6.2%

1,685

2,207

-23.7%

Semi-finished products

0

0

n/a

144

192

-25.0%

Construction products

68

61

11.8%

262

256

2.3%

Railway products

99

91

8.8%

404

441

-8.4%

Flat-rolled products

113

100

13.0%

382

523

-27.0%

Tubular products

84

91

-7.7%

494

795

-37.9%

 

In Q4 2020, crude steel production was 26.6% higher QoQ, following increased demand for flat-rolled and construction products driven by a market recovery. In FY2020, crude steel production was down 15.1% YoY, mainly due to market turbulence amid the COVID-19 pandemic and energy market uncertainty, which led to falling demand and lower production volumes.

 

Semi-finished products sales fell by 25.0% YoY, following the fulfilment of a contract with a key customer.

 

Sales of construction products and railway products went up by 11.8% and 8.8% respectively QoQ, due to improved market conditions and additional steel availability. Sales of railway products in FY 2020 decreased by 8.4% YoY, primarily due to reduced demand driven by the COVID-19 pandemic.

 

Flat-rolled product sales rose by 13.0% QoQ, as a result of improving market conditions. In FY2020, sales of flat-rolled products dropped by 27.0% YoY, as market demand contracted amid the COVID-19 pandemic.

 

Tubular products sales declined by 7.7% QoQ, and 37.9% YoY, as turbulence in the oil and gas markets led to falling demand, resulting in the idling of the Group's OCTG mills in Canada and the US. At the same time, line pipe production continued to be stable during the period as both large and small diameter mills were producing to current orders.

 



 

Average selling prices

US$/tonne (ex-works)

Q4

2020

Q3

2020

12m

2020

12m

2019

Construction products

677

649

664

745

Flat-rolled products

728

719

754

911

Tubular products

1 327

1 401

1 349

1 340

 

In Q1 2021, production and sales volumes for construction, flat-rolled and rail products are expected to continue to improve in line with market recovery. For tubular products, the uncertainty in energy markets remains a significant factor impacting North American customers, however, the OCTG market has started demonstrating early signs of returning demand.

 

 

COAL SEGMENT

Production volumes

Product, '000 tonnes

Q4

2020

Q3

2020

Q4 2020/ Q3 2020, change

12m 2020

12m
2019

12m 2020/ 12m 2019, change

Raw coking coal (mined)

6,021

4,775

26.1%

20,653

26,140

-21.0%

Yuzhkuzbassugol

3,257

3,341

-2.5%

11,355

12,180

-6.8%

Raspadskaya

2,764

1,434

92.7%

9,262

12,824

-27.8%

Mezhegeyugol

0

0

n/a

36

1,136

-96.8%

Coking coal concentrate (production)

3,615

3,398

6.4%

13,598

13,975

-2.7%

Produced at Yuzhkuzbassugol coal
washing plants

1,804

1,506

19.8%

6,049

6,247

-3.2%

Produced at the Raspadskaya coal
washing plant

1,811

1,892

-4.3%

7,549

7,728

-2.3%

 

In Q4 2020, overall raw coking coal output grew by 26.1% QoQ, driven by re-launched production at the Razrez Raspadsky open pit as well as better production volumes at the Raspadskaya mine. In FY2020, production of raw coking coal went down by 21.0% YoY, due to a halt in mining at the Razrez Raspadsky open pit from May to September 2020, the idling of Mezhegeyugol mine starting from March 2020 and lower production volumes at the Raspadskaya mine amid challenging geological conditions.

 

Output of coking coal concentrate rose by 6.4% QoQ, mainly due to increased coal mining volumes.

 

Sales volumes

Product, '000 tonnes

Q4

2020

Q3

2020

Q4 2020/ Q3 2020, change

12m

2020

12m

2019

12m 2020/ 12m 2019, change

External sales

  2,797

  3,460

-19.2%

12,336

11,053

11.6%

Raw coking coal*

250

822

-69.6%

2,271

1,929

17.7%

Coking coal concentrate*

2,547

2,638

-3.4%

10,065

9,124

10.3%

Intersegment sales

1,663

1,824

-8.8%

6,990

6,569

6.4%

  Raw coking coal

496

622

-20.2%

2,323

2,044

13.6%

Coking coal concentrate

1,166

1,202

-2.9%

4,667

4,525

3.1%

*The 12m 2019 data have been adjusted

External sales volumes of coking coal products fell by 19.2% QoQ, due to a deficit of GZh grade coal amid longwall move at the Uskovskaya mine as well as elevated levels of Q2-Q3 2020 sales amid utilisation of stockpiles. In FY2020, external sales volumes of coking coal products increased by 11.6% YoY, following higher shipments of raw coal from the Uskovskaya mine. Coking coal concentrate sales volumes rose by 10.3% YoY, due to higher shipments to Southeast Asian countries and Russia, amid the greater utilisation of accumulated stockpiles during Q2-Q3 2020.

Cash cost, US$/t

Q4

2020

Q3

2020

Q4 2020 / Q3 2020, change

12m

2020

12m

2019

12m 2020 / 12m 2019, change

Coking coal concentrate

26

31

-16.1%

31

35

-11.4%

 

Average selling prices

 

US$/tonne (ex-works)

 

Q4

2020

Q3

2020

12m

2020

12m

2019

Raw coking coal

  34

  30

34

49

Coking coal concentrate

  56

  57

62

99

 

In Q1 2021, raw coal production is expected to increase QoQ, amid the completion of the longwall move at the Uskovskaya mine, a return to planned capacity after the resumption of production at the Razrez Raspadsky open pit, and favourable mining and geological conditions at the Esaulskaya mine. This will be partly offset by unfavourable mining and geological conditions at the Alardinskaya and Raspadskaya mines.

 



 

Notes:

Semi-finished products include slabs, billets, pipe blanks and other semi-finished products.

Construction products include beams, channels, angles, rebars, wire rods, wire and other construction products.

Railway products include rails, wheels, tyres and other railway products.

Flat-rolled products include commodity plate, specialty plate and other flat products.

Tubular products include large-diameter line pipes, ERW pipes and casings, seamless pipes and other tubular products.

Other steel products include rounds, grinding balls, mine uprights, strips, etc.

 

 

 

###

 

For further information:

 

Media Relations:

+7 495 937 6871

media@evraz.com

 

Investor Relations:

+7 495 232 1370

ir@evraz.com

 

EVRAZ is a vertically integrated steel, mining and vanadium business with operations in Russia, Kazakhstan, the US, Canada and Czech Republic. EVRAZ is among the top steel producers in the world based on crude steel production of 14 million tonnes in 2019. A significant portion of the Group's internal consumption of iron ore and coking coal is covered by its mining operations. The Group's consolidated revenues for the year ended 31 December 2019 were US$11,905 million, and consolidated EBITDA amounted to US$2,601 million.

 

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