Ukraine's Metinvest Reports Metallurgical and Mining Divisions' Quarterly Results
08/08/2013 - Metinvest B.V., the parent company of a vertically integrated group of steel and mining companies, announced its operational results for the second quarter and the first six months ended 30 June 2013.
2Q 2013 Highlights
- Production of crude steel up 1% q-o-q to 3,138,000 tonnes
- Production of iron ore concentrate virtually unchanged q-o-q at 9,339,000 tonnes
- Mining of coking coal up 5% q-o-q to 3,028,000 tonnes
1H 2013 Highlights
- Production of crude steel down 8% y-o-y to 6,239,000 tonnes
- Production of iron ore concentrate up 2% y-o-y to 18,664,000 tonnes
- Mining of coking coal down 3% y-o-y to 5,924,000 tonnes
Metallurgical Division
In the second quarter of 2013 (2Q 2013), Metinvest produced 2,873,000 tonnes of hot metal, up 6% q-o-q, and 3,138,000 tonnes of crude steel, up 1%. The latter increase was primarily driven by an increase in production at Yenakiieve Iron and Steel Works (Yenakiieve Steel) of 100,000 tonnes, offset by a decrease at Ilyich Iron and Steel Works (Ilyich Steel) of 71,000 tonnes.
In the first half of the year (1H 2013), crude steel production dropped to 6,239,000 tonnes, down 8% y-o-y, as output fell by 167,000 tonnes at Azovstal Iron and Steel Works (Azovstal), 306,000 tonnes at Ilyich Steel and 35,000 tonnes at Yenakiieve Steel.
Production of hot metal
In 2Q 2013, output of semi-finished products rose to 744 tonnes, up 11% q-o-q. This was mainly due to the Group boosting production of merchant pig iron by 67,000 tonnes and Yenakiieve Steel increasing output of square billets by 27,000 tonnes. At the same time, output of merchant slabs fell by 21,000 tonnes, as Azovstal increased its intake to manufacture more flat products.
In 1H 2013, output of merchant semi-finished products increased to 1,415,000 tonnes, up 8% y-o-y, as the Group’s enterprises boosted output of merchant pig iron by 22,000 tonnes, while Azovstal produced an additional 57,000 tonnes of merchant slabs and Ilyich Steel an extra 34,000 tonnes.
Output of metal products
In 2Q 2013, production of finished goods dropped to 2,072,000 tonnes, down 8% q-o-q:
- plate production fell by 123,000 tonnes at Ilyich Steel, but was partly offset by an increase of 33,000 tonnes at Azovstal
- coil production dropped by 126,000 tonnes at Ilyich Steel and 36,000 tonnes at Ferriera Valsider
- output of long products climbed by 60,000 tonnes due to additional orders in Bulgaria and renewed demand for sections in Ukraine
- output of rail products increased by 15,000 tonnes
In 1H 2013, output of finished goods dropped to 4,324,000 tonnes, down 8% y-o-y. This was caused by a decline in production of flat goods (327,000 tonnes) – particularly coils (130,000 tonnes) and plates (197,000 tonnes) – and rail products (52,000 tonnes) as a result of a fall in orders.
In 1H 2013, output of long products remained almost unchanged y-o-y. Output of sections increased by 55,000 tonnes at Promet Steel due to improved demand in Bulgaria. Production at the Group’s Ukrainian enterprises fell by 48,000 tonnes following the decommissioning of Yenakiieve Steel's mill 360 in the second half of 2012 and a lack of orders.
In 1H 2013, output of tubular products dropped to 155,000 tonnes due to the completion of major infrastructure projects in 2012.
Mining Division
Production of iron ore concentrate and pellets
In 2Q 2013, overall production of iron ore concentrate remained broadly unchanged q-o-q. The volume of merchant concentrate sold to third parties dropped by 548,000 tonnes, of which 421,000 tonnes was redirected to merchant pellet production, which increased by 368,000 tonnes, while 127,000 tonnes was attributable to greater internal consumption. The increase in the volume of pellets sold to third parties was due to the pellet shop at Northern Iron Ore Enrichment Works (Northern GOK) restarting operations following maintenance work in January-February.
In 1H 2013, overall production of iron ore concentrate rose to 18,664,000 tonnes, up 2% y-o-y, due to various operational improvements and mining of iron ore with a higher Fe content.
The volume of merchant concentrate sold to third parties increased to 6,932,000 tonnes, up 9% y-o-y, as the Group increased efficiency and reduced internal consumption.
In 1H 2013, the volume of pellets sold to third parties increased to 4,483,000 tonnes, up 15% y-o-y. This was mainly attributable to a decline in intra-Group consumption of 769,000 tonnes, offset by a decrease in production at Northern GOK of 175,000 tonnes due to an overhaul of the roasting machines.
Coal mining and output of coal products
In 2Q 2013, the Group increased coking coal mining to 3,028,000 tonnes, up 5% q-o-q. This was driven by greater output at United Coal (up 292,000 tonnes), offset by a decrease in volumes at Krasnodon Coal (down 160,000 tonnes) due to the decommissioning of the Vostochno-Orlovskaya longwall face at the Molodogvardeyskaya mine.
In 1H 2013, mining of coking coal dropped to 5,924,000 tonnes, down 3% y-o-y. United Coal decreased output by 254,000 tonnes, while Krasnodon Coal increased volumes by 64,000 tonnes following the commissioning of a highly productive longwall face at the Sukhodolska-Vostochnaya mine.
United Coal did not mine any steam coal in 1H 2013 due to low demand on the U.S. market.
