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EVR Evraz Plc

82.68
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Evraz Plc LSE:EVR London Ordinary Share GB00B71N6K86 ORD USD0.05
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 82.68 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Bitmns Coal Undergrnd Mining 14.16B 3.03B 2.0799 0.40 1.21B

Evraz Plc Q4 and FY 2017 production report (2316C)

18/01/2018 7:00am

UK Regulatory


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TIDMEVR

RNS Number : 2316C

Evraz Plc

18 January 2018

EVRAZ Q4 and FY 2017 PRODUCTION REPORT

18 January 2018 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group") today released its operational results for the fourth quarter and full year of 2017.

Q4 2017 vs Q3 2017 OPERATIONAL HIGHLIGHTS:

-- In Q4 2017, EVRAZ' consolidated crude steel output remained stable QoQ at 3.5 million tonnes.

-- Consolidated output of steel products, net of re-rolled volumes, rose by 5.7% QoQ to 3.3 million tonnes, mainly due to higher steel product output at EVRAZ ZSMK's mill amid planned capital repairs of blast furnace no. 2 in June and July.

-- Higher volumes of semi-finished products led to increased steel product output at the Russian steel mills, net of re-rolled volumes. Meanwhile, output of construction products fell, reflecting the seasonal slowdown in demand for construction products in Russia and the impact of changes to the sales mix.

-- Railway product output grew, driven by the completion of repairs at EVRAZ ZSMK's rail mill in Q3 2017, which had impacted production volumes in that period.

-- In North America, output of crude steel and steel products were almost unchanged from Q3 2017.

-- In Q4 2017, output of raw coking coal decreased, primarily due to scheduled longwall repositioning at the Alardinskaya and Uskovskaya mines. Output of coking coal concentrate climbed by 7.8% QoQ (inventories were used in production) due to greater market demand, better washing plants performance and debottlenecking of logistics capacities.

FY 2017 vs FY 2016 HIGHLIGHTS:

-- In 2017, consolidated crude steel production and steel product output, net of re-rolled volumes, increased by 3.8% and 3.2%, respectively. This was mainly attributable to improved market demand in North America and higher crude steel production at EVRAZ ZSMK following the completion of planned capital repairs at its blast furnaces in 2016.

-- Output of steel products, net of re-rolled volumes, at the Russian steel mills reflected higher volumes of semi-finished products, while output of construction products fell in line with the change in the sales mix.

-- Railway product output at EVRAZ NTMK rose amid improved market conditions and higher production of railway products in North America after Class I railroads finished destocking.

-- Greater production of flat-rolled products was triggered by higher production volumes at EVRAZ Palini e Bertoli. It was accompanied by higher output in North America due to improved demand, primarily from the wind tower and energy segments.

-- In North America, output of tubular products (oil country tubular goods, or OCTG, and small-diameter line pipe) improved thanks to the strong market recovery.

-- Production of coking coal concentrate grew by 6.2% YoY. This was driven by higher annual output at the Raspadskaya mines and Mezhegeyugol in 2017.

STEEL

 
 Product, '000 tonnes        Q4 2017   Q3 2017   Q4 2017 / Q3 2017, change       2017       2016   2017 / 2016, change 
--------------------------  --------  --------  --------------------------  ---------  ---------  -------------------- 
 Coke (saleable)                 220       232                       -5.0%        741        903                -17.9% 
 Pig iron                      2,805     2,827                       -0.8%     11,320     11,314                  0.1% 
   Pig iron (saleable)            55        76                      -28.3%        370        407                 -9.0% 
 Crude steel                   3,546     3,496                        1.4%     14,033     13,513                  3.8% 
 Steel products, gross*        3,484     3,354                        3.9%     13,566     13,081                  3.7% 
 Steel products, net of 
  re-rolled volumes            3,306     3,127                        5.7%     12,676     12,288                  3.2% 
   Semi-finished 
    products**                 1,613     1,196                       34.9%      5,340      5,192                  2.8% 
   Finished products           1,692     1,931                      -12.4%      7,336      7,096                  3.4% 
       Construction 
        products                 735     1,028                      -28.6%      3,609      3,942                 -8.4% 
       Railway products          411       374                       10.0%      1,613      1,491                  8.2% 
       Flat-rolled 
        products***              198       197                        0.5%        793        581                 36.5% 
       Tubular products          195       182                        6.8%        703        503                 39.7% 
       Other steel 
        products                 154       150                        2.7%        618        578                  6.9% 
--------------------------  --------  --------  --------------------------  ---------  ---------  -------------------- 
 

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

* Gross volume of steel products in the tables includes those re-rolled at other EVRAZ mills. However, such volumes are eliminated as inter-company sales for the purposes of EVRAZ' consolidated operating results.

** Consolidated production volumes of semi-finished products are preliminary, as intra-group re-rolling volumes are yet to be finalised.

*** Includes production volumes of EVRAZ Palini e Bertoli (250 thousand tonnes in 2017 and 68 thousand tonnes in 2016).

RUSSIA and KAZAKHSTAN

 
 Product, '000 tonnes        Q4 2017   Q3 2017   Q4 2017 / Q3 2017, change       2017       2016   2017 / 2016, change 
--------------------------  --------  --------  --------------------------  ---------  ---------  -------------------- 
 Coke (saleable)                 116       113                        2.3%        373        377                 -1.1% 
 Pig iron                      2,554     2,547                        0.3%     10,301     10,246                  0.5% 
   Pig iron (saleable)            35        34                        0.3%        196        319                -38.8% 
 Crude steel                   2,842     2,783                        2.1%     11,367     11,100                  2.4% 
 Steel products, gross         2,711     2,605                        4.0%     10,681     10,541                  1.3% 
 Steel products, net of 
  re-rolled volumes            2,666     2,551                        4.5%     10,478     10,293                  1.8% 
   Semi-finished products      1,571     1,234                       27.2%      5,519      5,183                  6.5% 
   Finished products           1,095     1,316                      -16.8%      4,959      5,109                 -3.0% 
      Construction 
       products                  625       897                      -30.3%      3,139      3,407                 -7.9% 
      Railway products           326       285                       14.4%      1,251      1,166                  7.3% 
      Other steel products       144       135                        7.2%        569        537                  6.0% 
--------------------------  --------  --------  --------------------------  ---------  ---------  -------------------- 
 

In Q4 2017, output of steel products (net of re-rolled volumes) increased by 4.5% QoQ, mostly due to higher volumes of semi-finished products, offsetting the decrease in construction product volumes. In FY 2017, production of steel products edged up by a slight 1.8% YoY.

Production of construction products fell by 30.3% QoQ, while volumes of semi-finished products rose by 27.2% QoQ, reflecting softer demand for construction products as Russia's construction industry enters its slow season and the impact of changes to the sales mix. In FY 2017, construction product volumes declined amid sales mix changes.

Production of railway products grew by 14.4% QoQ due to a low-base effect, as output in Q3 2017 was impacted by capital repairs at EVRAZ ZSMK's rail mill. For the full year, railway product output climbed by 7.3% YoY due to higher demand for railcar sections, wheels and other railway products.

Average selling prices

 
 US$/tonne (ex works)        Q4 2017   Q3 2017       2017       2016 
--------------------------  --------  --------  ---------  --------- 
 Coke                            220       173        195         98 
 Pig iron                        285       282        265        167 
 Steel products 
   Semi-finished products        427       364        374        254 
   Construction products         581       543        536        392 
   Railway products              661       648        643        489 
   Other steel products          574       506        521        381 
--------------------------  --------  --------  ---------  --------- 
 

Overall, steel selling prices in Q4 2017 followed positive global benchmark trends.

In Q1 2018, pig iron production is expected to edge down by approximately 2% QoQ, due to the shutdown of EVRAZ NTMK's blast furnace no. 6 for capital repairs and launch of blast furnace no. 7 in February 2018.

NORTH AMERICA

 
                                                     Q4 2017 / Q3 2017, 
 Product, '000 tonnes        Q4 2017*   Q3 2017            change                2017       2016   2017 / 2016, change 
--------------------------  ---------  --------  -------------------------  ---------  ---------  -------------------- 
 Crude steel                      447       441                       1.5%      1,748      1,355                 29.0% 
 Steel products, net of 
  re-rolled volumes               460       466                      -1.2%      1,851      1,584                 16.9% 
   Construction products           57        58                      -1.1%        243        242                  0.4% 
   Railway products                85        89                      -4.2%        362        326                 11.2% 
   Flat-rolled products           123       137                      -9.9%        543        513                  5.8% 
   Tubular products               195       182                       6.8%        703        503                 39.7% 
--------------------------  ---------  --------  -------------------------  ---------  ---------  -------------------- 
 

* Q4 2017 and FY 2017 production volumes are preliminary

In Q4 2017, crude steel production increased by 1.5% QoQ as result of improved operational efficiencies at EVRAZ Regina's mill. In FY 2017, crude steel production surged 29.0% YoY on the back of improving demand.

Railway product output climbed by 11.2% YoY, driven by Class I railroads finalising destocking. In quarterly terms, volumes were down 4.2% due to fewer operating days caused by the holidays.

Production of flat-rolled products went up 5.8% YoY amid higher demand, primarily from the wind tower and energy segments. On a quarterly basis, volumes decreased by 9.9% due to a seasonal reduction in demand.

Output of tubular products rose by 39.7% YoY and 6.8% QoQ. Demand for OCTG and small-diameter line pipe staged a strong recovery during 2017. Line pipe demand, in contrast, continued to be impacted by the slow pace of project approvals.

Average selling prices

 
                                     Q3 
 US$/tonne (ex works)     Q4 2017    2017       2017       2016 
-----------------------  --------  ------  ---------  --------- 
 Construction products        648     645        629        513 
 Flat-rolled products         763     822        788        640 
 Tubular products           1,209   1,197      1,108        970 
-----------------------  --------  ------  ---------  --------- 
 

Prices for most steel products were up during Q4 2017 reflecting higher prevailing prices for scrap and other inputs, reduced pressure from imports, and improving demand fundamentals. Prices for flat products subsided in Q4 2017 due to decreased demand in the core market, resulting in greater non--core volume at reduced pricing.

In Q1 2018, crude steel output is expected to rise slightly QoQ. Tubular and construction products volumes are expected to grow by 5-10% QoQ, flat-rolled products are expected to increase 5-10% QoQ due to a seasonal uptick in demand, and railway product volumes are expected to grow by 2-5% QoQ.

UKRAINE

 
 Product, '000 tonnes        Q4 2017   Q3 2017   Q4 2017 / Q3 2017, change       2017       2016   2017 / 2016, change 
--------------------------  --------  --------  --------------------------  ---------  ---------  -------------------- 
 Coke (saleable)                 104       119                      -12.0%        369        526                -30.0% 
 Pig iron                        251       280                      -10.4%      1,019      1,068                 -4.6% 
   Pig iron (saleable)            20        42                      -52.0%        174         87                 99.6% 
 Crude steel                     257       273                       -5.8%        918      1,057                -13.2% 
 Steel products                  238       223                        6.5%        785        889                -11.7% 
   Semi-finished products        176       135                       30.7%        508        554                 -8.4% 
   Finished products              62        89                      -29.9%        277        335                -17.2% 
    Construction products         52        73                      -28.5%        228        293                -22.3% 
    Other steel products          10        15                      -36.6%         49         41                 19.1% 
--------------------------  --------  --------  --------------------------  ---------  ---------  -------------------- 
 

Saleable coke volumes were down YoY mainly due to unstable work at EVRAZ DMZ' coke and by--product plant.

Pig iron output fell by 10.4% QoQ, following lower blast furnace productivity and maintenance repairs. Saleable pig iron volumes decreased, reflecting the switch to billet production amid rising prices for semi-finished products. In FY 2017, pig iron output went down 4.6% YoY in response to disruptions of coal supplies in Q1 2017 and reduced productivity of blast furnaces due to lower billet production (which had a lower margin in the product mix).

Saleable pig iron volumes surged by 99.6% YoY following changes to the sales mix caused by higher sales of pig iron, which had a higher export margin than billet (mainly in Q2 2017), as well as by capital repairs at EVRAZ DMZ' oxygen-converter plant and rolling mill no. 1.

Production of crude steel fell by 5.8% QoQ amid declining pig iron output. Output of crude steel dropped by 11.7% YoY due to capital repairs at EVRAZ DMZ and greater saleable pig iron volumes.

In Q4 2017, changes in the steel product mix reflected improved demand for semi-finished products and lower construction product sales amid softer demand. Output of steel products decreased by 11.7% YoY. Changes to the product mix of steel products since the year prior reflected lower demand for construction products and higher sales volumes of pig iron.

Average selling prices

 
 US$/tonne (ex works)        Q4 2017   Q3 2017       2017       2016 
--------------------------  --------  --------  ---------  --------- 
 Coke (saleable)                 278       217        246        144 
 Pig iron                        315       315        319        209 
 Steel products 
   Semi-finished products        436       396        388        275 
   Construction products         546       555        516        369 
   Other steel products          694       611        641        522 
--------------------------  --------  --------  ---------  --------- 
 

In Q4 2017, prices for most steel products rose QoQ, following global benchmarks. Prices for construction products edged down slightly QoQ due to the change in the market mix.

In Q1 2018, crude steel production volumes are expected to be to remain flat QoQ.

IRON ORE

 
 Product, '000 tonnes      Q4       Q3     Q4 2017 / Q3 2017, change    2017      2016   2017 / 2016, change 
                           2017     2017 
----------------------  -------  -------  --------------------------  -------  -------  -------------------- 
 Iron ore products*       4,329    4,195                        3.2%   18,042   19,907                 -9.4% 
----------------------  -------  -------  --------------------------  -------  -------  -------------------- 
 

* Includes production of sinter, pellets and other iron ore products.

In FY 2017, sinter output dropped by 9.4%, primarily due to the disposal of EVRAZ Sukha Balka in June 2017.

Average selling prices

 
 US$/tonne (ex works)    Q4 2017   Q3 2017   2017   2016 
----------------------  --------  --------  -----  ----- 
 Pellets (Russia)             54        52     61     38 
----------------------  --------  --------  -----  ----- 
 

Prices for pellets moved in line with global benchmarks.

In Q1 2018, sinter output is expected to grow by 9% QoQ and the production of pellets to expand by 2% QoQ.

COAL

 
                                            Q4 2017                        2017 
                                               / Q3                           / 
 Product, '000                 Q4      Q3     2017,                       2016, 
  tonnes                     2017    2017    change     2017     2016    change 
-------------------------  ------  ------  --------  -------  -------  -------- 
 Raw coking coal 
  (mined)                   5,593   6,062     -7.7%   23,306   22,257      4.7% 
-------------------------  ------  ------  --------  -------  -------  -------- 
  Yuzhkuzbassugol           2,468   3,236    -23.7%   10,967   11,182     -1.9% 
-------------------------  ------  ------  --------  -------  -------  -------- 
  Raspadskaya               2,876   2,602     10.5%   11,435   10,512      8.8% 
-------------------------  ------  ------  --------  -------  -------  -------- 
  Mezhegeyugol                249     224     11.0%      904      563     60.4% 
-------------------------  ------  ------  --------  -------  -------  -------- 
 Coking coal concentrate 
  (production)              4,112   3,814      7.8%   15,144   14,264      6.2% 
-------------------------  ------  ------  --------  -------  -------  -------- 
  Yuzhkuzbassugol's 
   coal washing plants      1,826   1,612     13.3%    6,419    6,221      3.2% 
-------------------------  ------  ------  --------  -------  -------  -------- 
  Raspadskaya's 
   coal washing plant       1,741   1,652      5.4%    6,641    6,271      5.9% 
-------------------------  ------  ------  --------  -------  -------  -------- 
  EVRAZ ZSMK's coal 
   washing plant              546     550     -0.7%    2,083    1,772     17.6% 
-------------------------  ------  ------  --------  -------  -------  -------- 
 

In Q4 2017, coking coal concentrate production increased by 7.8% QoQ due to greater market demand (coking coal inventories were used in production), better washing plants performance and debottlenecking of logistics capacity.

Production of raw coking coal decreased by 7.7% QoQ, primarily due to scheduled longwall repositioning at the Alardinskaya and Uskovskaya mines. This was partially offset by higher output of raw coking coal at the Raspadskaya and Raspadskaya-Koksovaya mines.

In FY 2017, raw coking coal production rose by 4.7% and coking coal concentrate production climbed by 6.2%. This was driven by higher annual output at the Raspadskaya mine, Raspadskaya-Koksovaya mine and Mezhegeyugol due to improved productivity. It was accompanied by higher coal concentrate production at EVRAZ ZSMK due to the larger share of coal concentrate produced using in-house capacity. This growth was partially offset by lower production of raw coking coal at the Razrez Raspadsky open pit due to repositioning of mining equipment to the Raspadskaya-Koksovaya mine for deficit OS (mid-vol HCC) coking coal grade production.

Average selling prices

 
 
   US$/tonne (ex works)     Q4 2017   Q3 2017       2017       2016 
-------------------------  --------  --------  ---------  --------- 
 Raw coking coal                 60        50         62         38 
 Coking coal concentrate        113        98        117         73 
-------------------------  --------  --------  ---------  --------- 
 

Coal prices were positive in both quarterly and yearly terms, in line with global benchmarks.

In Q1 2018, raw coal production is expected to increase QoQ following the completion of scheduled longwall repositioning at Yuzhkuzbassugol's mines in Q4 2017.

VANADIUM

 
 Product, tonnes          Q4      Q3     Q4 2017    2017     2016      2017 
  of V*                   2017    2017     / Q3                       / 2016, 
                                          2017,                       change 
                                          change 
----------------------  ------  ------  --------  -------  -------  --------- 
 Vanadium slag, gross 
  production (Russia)    4,372   4,916    -11.1%   18,636   16,886      10.4% 
 Vanadium in final 
  products (saleable)    2,682   2,745     -2.3%   11,359   12,861     -11.7% 
----------------------  ------  ------  --------  -------  -------  --------- 
 

(*) Calculated in pure vanadium equivalent

Vanadium slag production declined by 11.1% QoQ, reverting to the stable production volumes of 2016. In Q3 2017 as well as in Q2 2017 and Q1 2017 EVRAZ NTMK processed vanadium scrap which was accumulated over time and piled up as work in progress. Apart from that in Q4 2017 EVRAZ NTMK produced slightly less pig iron, which in turn caused some decrease in vanadium slag production. The latter was caused by planned capital repairs of blast furnace no. 5, and unstable operations of blast furnace no. 6 in October 2017, In FY 2017, vanadium slag output went up 10.4% YoY amid one-off processing of accumulated vanadium scrap and higher pig iron output.

In Q4 2017, output of saleable vanadium products went down 2.3% QoQ, primarily because of lower ferrovanadium conversion at 3rd parties, albeit the latter was partially compensated by higher production of oxides at EVRAZ Stratcor. Annual output of saleable vanadium products fell by 11.7% YoY due to lower nitrovan production as result of the disposal of EVRAZ Vametco in April 2017 as well as reduced vanadium aluminium production at EVRAZ Stratcor. This decrease was partially offset by a YoY upswing in ferrovanadium output.

Average FeV indices

 
 US$/kgV                                                                             Q4 2017   Q3 2017   2017    2016 
----------------------------------------------------------------------------------  --------  --------  ------  ------ 
 Metal Bulletin Ferro-Vanadium basis 78% min, free DDP, consumer plant, 1st grade 
  Western Europe                                                                       39.28     39.06   32.66   18.46 
 Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid                             42.72     38.89   33.99   20.48 
----------------------------------------------------------------------------------  --------  --------  ------  ------ 
 

In Q4 2017, the Metal Bulletin FeV80 index averaged US$39.28/kgV, almost flat QoQ. Meanwhile, the Ryan's Notes index, which is used in North America, averaged US$42.72/kgV in Q4 2017, up 10% from US$38.89/kgV in the previous quarter. In 2017, the averages for the Metal Bulletin FeV80 and the Ryan's Notes indexes jumped by 77% and 66% YoY, respectively. Sale prices for vanadium products followed market trends.

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. They also include railway products for Ukraine.

###

For further information:

Media Relations:

   London: +44 207 832 8998                               Moscow: +7 495 937 6871 

media@evraz.com

Investor Relations:

   London: +44 207 832 8990                              Moscow: +7 495 232 1370 

ir@evraz.com

EVRAZ is a vertically integrated steel, mining and vanadium business with operations in Russia, Ukraine, Kazakhstan, the US, Canada, the Czech Republic and Italy. EVRAZ is among the top steel producers in the world, based on crude steel production of 13.5 million tonnes in 2016. The Group's mining operations cover a significant portion of its internal consumption of iron ore and coking coal. The Group's consolidated revenues for the year ended 31 December 2016 were US$7,713 million and consolidated EBITDA amounted to US$1,542 million.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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