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EVRAZ Releases Production Report for Second Quarter of 2015
07/24/2015 - EVRAZ plc released its operational results for the second quarter of 2015 on 17 July.
Q2 2015 vs. Q1 2015 Operational Highlights:
During Q2 2015, the Company scheduled a 12-day maintenance outage at the Regina steel making facility and a 7-day outage at the Pueblo steel production facility which resulted in a 10% decrease in crude steel output compared to the previous quarter. Within construction products, the Company sees strong underlying demand for rebar and wire rod,
however high import levels continue to pressure down prices and volumes for North American producers.
Construction products (wire rod and HSS) output for the quarter declined 26% as a result of lower wire rod production and the sale of the Portland’s structural tubing facility in March 2015 (which accounted for 12 thousand tonnes in the first quarter). The terms of sale for the structural tubing facility included a supply agreement for coil and therefore these volumes form part of Flat-rolled products starting in the second quarter.
Rail production further grew by 3% QoQ supported by continued demand from Class 1 railroads. In Flat-rolled products, the market continued its de-stocking cycle. Third party saleable production for this segment increased 17% as volumes previously consumed by EVRAZ North America’s OCTG and hollow structural shapes mills declined. During the quarter, the Company scheduled maintenance outages at the Portland and Regina mills. At Portland, a 17-day outage originally scheduled in the fourth quarter to perform a large portion of the work required to re-line the re-heat furnace was pulled ahead into the second quarter. The balance of the work will be completed either during Q4 2015, or Q1 2016 depending on market conditions. In Regina, the Company carried out a 12-day outage to perform maintenance and carry out detailed engineering associated with the announced upgrades at the Regina steel making and rolling mills.
During Q2 2015, demand for OCTG products was exceptionally low as a result of de-stocking at distributors and the annual spring break-up period in Canada. Taken together, these two effects resulted in a 32% decrease in production in Q2 2015 vs. Q1 2015. During most of the quarter, operations were curtailed at the Pueblo seamless, Calgary, and Red Deer mills. During the last week of June, production resumed in limited volumes at the Pueblo seamless and Red Deer OCTG mills.
Prices for most steel products declined during the second quarter towards levels in-line with the general market that reflect prevailing scrap and plate prices across the product mix.
In Q2 2015, due to better quality of iron ore products used in EVRAZ DMZ steel mill’s pig iron production, output of pig iron and crude steel increased by 9% and of steel products by 15% compared to Q1 2015.
Production of semi-finished products for export surged by 28% QoQ driven by weaker demand for finished products.
In Q3 2015, volume of crude steel and steel products is expected to decrease as a result of scheduled maintenance works at a blast furnace (5 days) and rolling capacities in July.
Prices of steel products, primarily semi-finished products for export, were down in line with global benchmarks.
To read the full press release detailing EVRAZ's production for Q2 2015, visit ww.evraz.com.
EVRAZ is a vertically integrated steel, mining and vanadium business with operations in the Russian Federation, Ukraine,
Kazakhstan, USA, Canada, Czech Republic, Italy and South Africa. EVRAZ is among the top steel producers in the world based on crude steel production of 15.5 million tonnes in 2014. A significant portion of the company's internal consumption of iron ore and coking coal is covered by its mining operations. The company's consolidated revenues for the year ended 31 December 2014 were US$13,061 million, and consolidated EBITDA amounted to US$2,325 million.
- Consolidated crude steel output reached 3.4 million tonnes in Q2 2015, down 14% QoQ as a result of deconsolidation of EVRAZ Highveld Steel and Vanadium (EHSV) as well as repair and maintenance works at Russian steel mills.
- Production of steel products, net of re-rolled volumes, went down by 14% QoQ as a result of the above-mentioned two factors as well as softer demand for tubular goods in North America.
- The share of finished steel products within consolidated volumes grew to 65% in Q2 2015 from 61% in Q1 2015 due to lower production of semi-finished products in Russia resulting from shutdowns of billet casters for maintenance and a better demand for construction and railway products in Russia.
- Production volumes of railway products rose driven by increased orders by Russian Railways and other CIS customers and continued demand from Class 1 railroads in the USA.
- Production of tubular goods in North America declined as lower energy exploration activity, destocking at distributors, and usual spring break-up negatively affected OCTG demand.
- Consolidated raw coking coal output and production of coking coal concentrate declined by 30% and 8% respectively QoQ due to lower output of both the Raspadskaya coal company and Yuzhkuzbassugol as a result of scheduled longwall moves and adjustment of production plans in response to weak market conditions.
During Q2 2015, the Company scheduled a 12-day maintenance outage at the Regina steel making facility and a 7-day outage at the Pueblo steel production facility which resulted in a 10% decrease in crude steel output compared to the previous quarter. Within construction products, the Company sees strong underlying demand for rebar and wire rod,
however high import levels continue to pressure down prices and volumes for North American producers.
Construction products (wire rod and HSS) output for the quarter declined 26% as a result of lower wire rod production and the sale of the Portland’s structural tubing facility in March 2015 (which accounted for 12 thousand tonnes in the first quarter). The terms of sale for the structural tubing facility included a supply agreement for coil and therefore these volumes form part of Flat-rolled products starting in the second quarter.
Rail production further grew by 3% QoQ supported by continued demand from Class 1 railroads. In Flat-rolled products, the market continued its de-stocking cycle. Third party saleable production for this segment increased 17% as volumes previously consumed by EVRAZ North America’s OCTG and hollow structural shapes mills declined. During the quarter, the Company scheduled maintenance outages at the Portland and Regina mills. At Portland, a 17-day outage originally scheduled in the fourth quarter to perform a large portion of the work required to re-line the re-heat furnace was pulled ahead into the second quarter. The balance of the work will be completed either during Q4 2015, or Q1 2016 depending on market conditions. In Regina, the Company carried out a 12-day outage to perform maintenance and carry out detailed engineering associated with the announced upgrades at the Regina steel making and rolling mills.
During Q2 2015, demand for OCTG products was exceptionally low as a result of de-stocking at distributors and the annual spring break-up period in Canada. Taken together, these two effects resulted in a 32% decrease in production in Q2 2015 vs. Q1 2015. During most of the quarter, operations were curtailed at the Pueblo seamless, Calgary, and Red Deer mills. During the last week of June, production resumed in limited volumes at the Pueblo seamless and Red Deer OCTG mills.
Prices for most steel products declined during the second quarter towards levels in-line with the general market that reflect prevailing scrap and plate prices across the product mix.
In Q2 2015, due to better quality of iron ore products used in EVRAZ DMZ steel mill’s pig iron production, output of pig iron and crude steel increased by 9% and of steel products by 15% compared to Q1 2015.
Production of semi-finished products for export surged by 28% QoQ driven by weaker demand for finished products.
In Q3 2015, volume of crude steel and steel products is expected to decrease as a result of scheduled maintenance works at a blast furnace (5 days) and rolling capacities in July.
Prices of steel products, primarily semi-finished products for export, were down in line with global benchmarks.
To read the full press release detailing EVRAZ's production for Q2 2015, visit ww.evraz.com.
EVRAZ is a vertically integrated steel, mining and vanadium business with operations in the Russian Federation, Ukraine,
Kazakhstan, USA, Canada, Czech Republic, Italy and South Africa. EVRAZ is among the top steel producers in the world based on crude steel production of 15.5 million tonnes in 2014. A significant portion of the company's internal consumption of iron ore and coking coal is covered by its mining operations. The company's consolidated revenues for the year ended 31 December 2014 were US$13,061 million, and consolidated EBITDA amounted to US$2,325 million.
