TIDMEVR
RNS Number : 9147X
Evraz Plc
17 January 2014
EVRAZ Q4 2013 and FY2013 PRODUCTION REPORT
17 January 2014 - EVRAZ plc (LSE: EVR) today releases its
operational results for the fourth quarter of 2013 and full year of
2013.
FY 2013 OPERATIONAL HIGHLIGHTS:
-- Consolidated crude steel production and gross output of steel
products increased by 1% and 2% respectively, despite suspensions
in Europe and North America with Russian, Ukrainian and South
African operations contributing to the overall growth
-- EVRAZ NTMK implemented the PCI project allowing for the
sustainable reduction of operating costs
-- Production at EVRAZ ZSMK rail mill recommenced following the
successful completion of the major modernisation project and the
Company obtained all necessary approvals for commercial production
of head-hardened rails
-- EVRAZ suspended operations at EVRAZ Claymont and EVRAZ Palini
e Bertoli as part of the group wide optimisation plan
-- Production of saleable iron ore products decreased by 1% in
2013 as a result of the ongoing restructuring programme within the
iron ore business which resulted in the disposal of EVRAZ VGOK and
certain mines of Evrazruda
-- The coking coal business of the Group increased the output of
of raw coking coal in 2013 by 22% (on a pro-forma basis) with both
key assets Yuzhkuzbassugol and the Raspadskaya coal company
contributing significantly to the growth
-- EVRAZ commissioned a new coking coal mine - Yerunakovskaya
VIII, which will be a large scale and low cost operation
-- EVRAZ continued the integration of the Raspaskaya coal
company following its acquisition in January 2013
-- Although underlying demand for most steel product groups in
Russia and North America was strong, average selling prices for all
key product groups continued to soften over the year in line with
global benchmarks
Q4 2013 OPERATIONAL HIGHLIGHTS and RECENT DEVELOPMENTS:
-- Consolidated crude steel production was broadly flat in Q4 2013 vs. Q3 2013
-- Output of gross steel products remained unchanged vs. Q3 2013
supported by export demand for Russian made semi-finished products
and a strong order book for tubular products in North America while
the output of construction products showed seasonal decline
-- Share of finished steel products decreased to 69% in Q4 2013
vs. 75% in Q3 2013 due to seasonal factors and redistribution of
production at the Russian steel mills towards semi-finished
products
-- Output of iron ore products decreased by 10% in Q4 2013 as a
result of the disposal of EVRAZ VGOK in October 2013
-- Consolidated raw coking coal output grew 5% driven by
increased mining volumes at Yuzhkuzbassugol, and despite two of the
mines of the Raspadskaya coal company being closed for
repositioning of longwalls
-- In October 2013, EVRAZ sold the Gramoteinskaya steam coal
mine, which was adjudged to be a non-core operation for EVRAZ's
coking coal business
-- In November 2013, EVRAZ was awarded with a compliance
certificate for head-hardened rails with lengths of up to 100
meters, allowing the Company to launch commercial production. The
first batch of 10 thousand tonnes of 25-meter head-hardened rails
was shipped to the Russian Railways in December 2013
-- In December 2013, EVRAZ announced the completion of
construction works and commencement of hot tests at the
light-section rolling mill in Kostanay, Kazakhstan, with a nominal
capacity of 450 thousand tonnes of construction products, which are
currently in strong demand in the Central Asian markets
-- In December 2013, the Raspadskaya coal company launched a new
longwall at its flagship Raspadskaya underground mine, being an
important milestone in the programme of mining volume growth for
2014
-- In December 2013, EVRAZ announced the sale of a number of
Evrazruda's loss making iron ore assets and utilities companies
located in the Republic of Khakassia and the Kemerovo region as
part of its iron ore asset portfolio optimisation programme
-- Average selling prices for EVRAZ's key steel product groups
changed responding to global steel and local market demand, changes
in product mix and seasonal factors
-- Prices for iron ore products slightly increased in line with global benchmarks
-- Average quarterly prices for Russian-produced coking coal
concentrate are more resilient to price movements globally and
remained broadly at the level of Q3 2013
STEEL
Product, '000 tonnes 2013 2012 2013/ 2012, change Q4 2013 Q3 2013 Q4 2013/ Q3 2013, change
-------------------------------- ------- ------- ------------------- -------- -------- -------------------------
Coke (saleable) 1,380 1,416 -2.6% 283 342 -17.2%
Pig iron 12,553 12,031 4.3% 3,158 3,137 0.7%
Pig iron (saleable) 341 261 30.4% 119 131 -9.1%
Crude steel 16,109 15,932 1.1% 3,989 3,962 0.7%
Steel products, gross 15,972 15,701 1.7% 3,924 3,933 -0.2%
Steel products, net of
re-rolled volumes 14,673 14,195 3.4% 3,728 3,649 2.2%
Semi-finished products ** 3,843 3,153 21.9% 1,155 918 25.8%
Finished products 10,830 11,042 -1.9% 2,574 2,731 -5.8%
Construction products 5,186 5,207 -0.4% 1,250 1,363 -8.3%
Railway products 1,903 1,801 5.7% 510 515 -0.9%
Flat-rolled products 2,108 2,465 -14.5% 365 460 -20.6%
Tubular products 927 872 6.4% 273 229 18.9%
Other steel products 706 697 1.3% 175 163 7.3%
-------------------------------- ------- ------- ------------------- -------- -------- -------------------------
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's mills. However, such volumes are
eliminated as intercompany sales for purposes of EVRAZ's
consolidated operating results.
** Consolidated production volumes of semi-finished products are
preliminary as intra-group re-rolling volumes are yet to be
finalised.
RUSSIA
Product, '000 tonnes 2013 2012 2013/ 2012, change Q4 2013 Q3 2013 Q4 2013/ Q3 2013, change
-------------------------------- ------- ------- ------------------- -------- -------- -------------------------
Coke (saleable) 592 504 17.5% 117 141 -17.3%
Pig iron 10,936 10,554 3.6% 2,760 2,735 0.9%
Pig iron (saleable) 303 185 64.2% 110 110 0.8%
Crude steel 11,904 11,675 2.0% 2,986 2,967 0.6%
Steel products, gross 11,056 10,821 2.2% 2,780 2,753 1.0%
Steel products, net of
re-rolled volumes 10,799 10,556 2.3% 2,754 2,661 3.5%
Semi-finished products 4,517 4,091 10.4% 1,214 1,024 18.6%
Finished products 6,282 6,465 -2.8% 1,540 1,637 -5.9%
Construction products 4,185 4,281 -2.2% 1,016 1,109 -8.4%
Railway products 1,409 1,310 7.6% 380 389 -2.4%
Flat-rolled products 120 334 -64.1% 0 4 n/a
Other steel products 568 540 5.0% 144 135 7.0%
-------------------------------- ------- ------- ------------------- -------- -------- -------------------------
In 2013, the production of pig iron increased by 4% vs. 2012 to
10.9 million tonnes due to implementation of the PCI project at
EVRAZ NTMK and related operational improvements as well as more
efficient operation of the blast furnaces at both Russian steel
mills. The PCI project at NTMK also decreased the internal
requirements in coke and led to increased production of saleable
coke to third parties.
The output of crude steel and gross steel products tracked the
increased output of pig iron and each grew by 2% in 2013. At the
same time the share of finished products in 2013 vs. 2012 decreased
from 61% to 58% largerly explained by the growth in volumes of
semi-finished products by 10%, while the output of finished
products declined by 3%.
The higher output of semi-finished products in 2013 was due to
increased availability of crude steel and stable underlying demand
in EVRAZ's key export markets.
The production of finished products decreased by 3% year-on-year
due to lower output of flat-rolled products following the shutdown
of the plate rolling mill at EVRAZ ZSMK in June 2013 and the
reduced output of construction products, which were partially
offset by growth in production of railway products after the
completion of modernisation at the EVRAZ ZSMK rail mill in January
2013.
In Q4 2013, both pig iron and crude steel production were
broadly flat vs. Q3 2013. The production of coke saleable to third
parties decreased in the reporting quarter by 17% as output was
adjusted to the prevailing market demand.
In Q4 2013, production of gross steel products increased by 1%
compared to Q3 2013, with the volume of semi-finished goods growing
by 19% and the output of finished products declining by 6% driven
by low seasonal demand in the domestic market.
In November 2013, EVRAZ was awarded with a compliance
certificate for head-hardened rails with lengths of up to 100
meters, allowing the Company to launch the commercial production of
these products. The first batch of 10 thousand tonnes of 25-meter
head-hardened rails was shipped to the Russian Railways in December
2013.
In Q1 2014, there will be held 9-day scheduled maintenance works
at the EVRAZ ZSMK's blast furnace number 3 and one of the
converters, as well as 15-day scheduled maintenance works at EVRAZ
NTMK's blast furnace number 5 with simultaneous maintenance works
of converters.
In Q4 2013, selling prices for semi-finished steel products
increased reflecting slightly improving trends in the global steel
market. Prices for construction products decreased reflecting
seasonal demand, whilst prices for railway products increased with
the commencement of commercial sales of head-hardened rails
produced at the modenised ZSMK rail mill.
Average selling prices
USD/tonne (ex works) 2013 2012 Q4 2013 Q3 2013
-------------------------- ----- ----- -------- --------
Coke 160 191 137 150
Pig iron 301 353 317 292
Steel products
Semi-finished products 401 457 399 374
Construction products 649 677 632 639
Railway products 852 891 847 829
Flat-rolled products 560 607 296 393
Other steel products 658 729 645 634
-------------------------- ----- ----- -------- --------
NORTH AMERICA
Product, '000 tonnes 2013 2012 2013/ 2012, change Q4 2013 Q3 2013 Q4 2013/ Q3 2013, change
---------------------------------- ------ ------ ------------------- -------- -------- -------------------------
Crude steel 2,180 2,411 -9.6% 499 558 -10.7%
Steel products, net of re-rolled
volumes 2,760 2,662 3.7% 691 673 2.6%
Construction products 348 331 5.1% 78 81 -3.9%
Railway products 494 491 0.6% 130 126 3.7%
Flat-rolled products 990 968 2.3% 210 237 -11.4%
Tubular products 927 872 6.4% 273 229 18.9%
---------------------------------- ------ ------ ------------------- -------- -------- -------------------------
In 2013, crude steel output decreased by 10% to 2.2 million
tonnes due to outages at EVRAZ Pueblo and EVRAZ Regina during 2013,
and suspension of the EVRAZ Claymont mill in Q4 2013. Meanwhile,
the volume of output of finished products increased by 3.7% to 2.8
million tonnes, with a growth in production recorded across all
product groups.
The 5% increase in production of construction products was
driven by higher demand for structural tubing and rod & bar,
including new products launched in H2 2012-2013. However, the
capacity for construction products was negatively impacted by crude
steel availability at the EVRAZ Pueblo steel mill.
The rail mill operated close to the full capacity in 2013 and
the output remained broadly flat at 494 thousand tonnes of railway
products.
In 2013, the production of flat-rolled products remained
largerly unchanged at 990 thousand tonnes despite the suspension of
the EVRAZ Claymont mill in Q4 2013.
The annual output of tubular products increased by 6% compared
to 2012 driven by the relaunch of the pipe mill at EVRAZ Portland
Spiral (+32 thousand tonnes) and Camrose Long Seam Welded (+73
thousand tonnes) mills, and improved productivity and orders at
EVRAZ Regina Spiral (+113 thousand tonnes), which were partially
offset by lower OCTG demand, and an initiative to reduce finished
goods on-hand in the yard, as well as unplanned downtime at Pueblo
seamless.
In Q4 2013, crude steel volumes at EVRAZ's North American
operations decreased by 11% compared to Q3 2013 primarily due to
the suspension of EVRAZ Claymont and output decrease at Pueblo. The
output reduction at Pueblo was mainly due to additional downtime to
install investment upgrades and to resolve electrical issues.
The output of construction and railway products was flat
quarter-on-quarter, while the utilisation rates remained high.
The suspension of EVRAZ Claymont and scheduled maintenance works
at EVRAZ Regina's steel shop in October-November 2013 led to a 11%
decrease in production of flat-rolled products vs. Q3 2013.
In Q4 2013, production of tubular products increased by 43
thousand tonnes, or 19%, mostly driven by the stronger order
book.
In Q4 2013, prices for all major product groups remained largely
unchanged vs. Q3 2013 as a result of robust demand and satisfactory
product mix.
In Q1 2014, production of long products is expected to remain at
the high level achieved in Q4 2013, supported by the solid market
demand. The order book for tubular products is strong with planned
record high shipments subject to the availability of rail cars in
January.
Average selling prices
USD/tonne (ex works) 2013 2012 Q4 2013 Q3 2013
------------------------- ------ ------ -------- --------
Construction products 764 843 744 747
Railway products 932 987 919 930
Flat-rolled products 860 1,019 847 840
Tubular products 1,318 1,497 1,301 1,299
------------------------- ------ ------ -------- --------
UKRAINE
Product, '000 tonnes 2013 2012 2013/ 2012, change Q4 2013 Q3 2013 Q4 2013/ Q3 2013, change
----------------------------- ----- ----- ------------------- -------- -------- -------------------------
Coke (saleable) 788 913 -13.7% 166 201 -17.2%
Pig iron 978 857 14.1% 237 257 -7.7%
Pig iron (saleable) 38 77 -50.8% 9 21 -59.8%
Crude steel 995 820 21.4% 239 246 -2.8%
Steel products 854 702 21.6% 223 207 7.7%
Semi-finished products 359 244 47.1% 111 87 27.8%
Finished products 494 458 8.0% 112 120 -6.8%
Construction products 407 357 13.9% 91 101 -10.0%
Other steel products 87 101 -13.2% 21 19 10.6%
----------------------------- ----- ----- ------------------- -------- -------- -------------------------
EVRAZ's Ukrainian operations demonstrated solid performance in
2013 with output of pig iron rising by 14% to 978 thousand tonnes
and crude steel production increasing by 21% to 995 thousand
tonnes, as a result of increased efficiency of blast furnaces after
a number of operational improvements in the melting process, coke
quality and less downtime for repairs.
The lower output of coke saleable to third parties in 2013 was
driven by the increased in-house requirements for this product for
the blast furnace's process.
In 2013, the output of semi-finished products grew by 47% due to
strong demand for export billets. The Company also increased the
output of construction products, mostly channels, by 8%.
In Q4 2013, pig iron production decreased by 8%
quarter-on-quarter due to scheduled maintenance works at blast
furnaces in December 2013.
The crude steel output decreased by 3% quarter-on-quarter due to
lower volumes of output of pig iron. Despite this, the output of
steel products increased by 8% in Q4 2013 supported by the
feedstock of ingots built up in anticipation of maintenance works
at blast furnaces.
Maintenance works will be held in Q1 2014 to optimise the blast
furnaces' productivity.
Selling prices in Ukraine demonstrated diverging trends in Q4
2013 - while prices for semi-finished products moved in line with
FOB Black Sea benchmarks, the demand for construction products was
strong and resulted in 5% growth of average selling prices.
Average selling prices
USD/tonne (ex works) 2013 2012 Q4 2013 Q3 2013
-------------------------- ----- ----- -------- --------
Coke (saleable) 213 214 199 211
Pig iron 356 337 352 348
Steel products
Semi-finished products 465 524 452 462
Construction products 600 646 611 581
Other steel products 878 884 788 872
-------------------------- ----- ----- -------- --------
EUROPE
Product, '000 tonnes 2013 2012 2013/ 2012, change Q4 2013 Q3 2013 Q4 2013/ Q3 2013, change
----------------------------------- ----- ------ ------------------- -------- -------- -------------------------
Crude steel 388 454 -14.6% 102 46 119.4%
Steel products, gross 801 1,055 -24.0% 114 174 -34.3%
Steel products, net of re-rolled
volumes 792 1,028 -22.9% 114 174 -34.3%
Construction products 80 69 17.1% 28 22 29.6%
Flat-rolled products 693 920 -24.7% 83 147 -43.8%
Other steel products 19 39 -51.2% 3 5 -32.5%
----------------------------------- ----- ------ ------------------- -------- -------- -------------------------
The 2013 production results of the European operations of EVRAZ
totalled 792 thousand tonnes of steel products net of re-rolled
volumes vs. 1,028 thousand tonnes in 2012 and were primarily
impacted by the temporary suspension of works at EVRAZ Palini e
Bertoli in Italy from 21 August 2013 onwards (-187 thousand tonnes
of rolled products) as a result of subdued market demand in Europe,
and interrupted production at EVRAZ Vitkovice Steel (-67 thousand
tonnes of rolled products) driven by the level of slab stocks, pig
iron prices and market demand.
In Q4 2013, crude steel production increased by 119% compared to
Q3 2013 as a result of the EVRAZ Vitkovice Steel steel shop being
in operation for two months in Q4 compared to less than a month in
the previous quarter.
The volume of steel products in Q4 2013 declined by 34% compared
to Q3 2013, as the Italian mill remained idle and maintenance works
were carried out at EVRAZ Vitkovice's rolling facilities.
In Q1 2014, volumes are expected to return to Q3 2013 levels.
However, currently the market information does not indicate
sufficiently positive conditions to re-start Palini e Bertoli's
operations in Q1 2014.
The prices for steel products, both flat-rolled and
construction, rose in Q4 2013 compared to Q3 2013 on the back of
improved macroeconomic outlook for the European economy for
2014.
Average selling prices
USD/tonne (ex works) 2013 2012 Q4 2013 Q3 2013
------------------------- ----- ----- -------- --------
Construction products 873 876 892 842
Flat-rolled products 675 744 707 661
------------------------- ----- ----- -------- --------
SOUTH AFRICA
Product, '000 tonnes 2013 2012 2013/ 2012, change Q4 2013 Q3 2013 Q4 2013/ Q3 2013, change
----------------------------- ----- ----- ------------------- -------- -------- -------------------------
Pig iron 639 620 3.0% 161 145 11.1%
Crude steel 642 572 12.3% 164 144 13.6%
Steel products 502 461 8.8% 116 127 -8.1%
Semi-finished products 0 15 n/a 0 0 n/a
Finished products 502 446 12.4% 116 127 -8.1%
Construction products 166 169 -2.3% 37 50 -25.4%
Flat-rolled products 305 243 25.4% 72 72 0.3%
Other steel products 31 34 -7.4% 8 6 38.2%
----------------------------- ----- ----- ------------------- -------- -------- -------------------------
In 2013, the output of crude steel and steel products increased
by 12% and 9% respectively compared to 2012, due to the effect of a
low base in 2012, as a result of the operations of EVRAZ Highveld
Steel and Vanadium being affected by labour action.
In Q4 2013, the output of pig iron and crude steel at EVRAZ
Highveld Steel and Vanadium increased by 11% and 14% respectively,
as a results of the operations being temporarily scaled back in Q3
2013 to avoid the negative effect of peak electricity tariffs.
Q4 2013 hot metal production increased compared to Q3 2013 due
to the absence of measures to reduce electricity consumption during
expensive winter peak demand periods. Finished goods production
reduced in Q4 2013 compared to Q3 2013 as a result of a two-week
structural mill maintenance in December and customers' closures
during the festive season.
Prices of finished goods decreased in 2013 as a result of a
market mix change related to weaker local demand and higher export
sales. Prices in the domestic market increased in Q4 2013 vs Q3
2013, but due to the weakening of the Rand, the US dollar price
decreased.
Average selling prices
USD/tonne (ex works) 2013 2012 Q4 2013 Q3 2013
-------------------------- ----- ----- -------- --------
Steel products
Semi-finished products 436 489 156* 595
Construction products 717 737 632 689
Flat-rolled products 689 765 609 674
Other steel products 660 604 497 698
-------------------------- ----- ----- -------- --------
*The calculation includes a year-end adjustment to the selling
expenses. The price excluding the adjustment would be $357/t
MINING
IRON ORE
Product, '000 tonnes 2013 2012 2013/ 2012, change Q4 2013 Q3 2013 Q4 2013/ Q3 2013, change
-------------------------------- ------ ------ ------------------- -------- -------- -------------------------
Concentrate, saleable (Russia) 4,692 5,615 -16.4% 982 1,264 -22.3%
Sinter (Russia) 4,396 4,698 -6.4% 904 1,124 -19.6%
Pellets (Russia) 6,301 6,051 4.1% 1,575 1,606 -1.9%
Lumpy ore (Ukraine) 2,973 2,608 14.0% 796 717 11.0%
Lumpy ore (South Africa) 1,431 1,174 21.9% 298 377 -20.9%
Fines ore (South Africa) 651 607 7.2% 145 154 -5.7%
-------------------------------- ------ ------ ------------------- -------- -------- -------------------------
In 2013, the overall production of saleable iron ore products by
the Company decreased by 1% and amounted to 20.4 million tonnes
compared with 20.8 million tonnes in 2012. The primary driver of
the decreased production was the performance of the Russian
operations where the output of saleable iron ore products declined
by 6% from 16.4 million tonnes to 15.4 million tonnes largely
driven by the disposal of the high cost operation EVRAZ VGOK in
October 2013 (EVRAZ VGOK produced 1.7 million tonnes of saleable
iron ore products in 2013) and the shutdown of the uneconomic Irba
mine from July 2013 (approx. 0.2 million tonnes of iron ore
concentrate was produced out of the Irba mine's iron ore in 2013).
At the same time the performance of the low cost large scale open
pit mine EVRAZ KGOK was stronger in 2013 vs. 2012 by 2%, or 195
thousand tonnes, and amounted to 9.8 million tonnes.
In the reporting year the Ukrainian and South African iron ore
mines also increased their output by 0.7 million tonnes as a result
of the successful implementation of programmes designed to
debottleneck and improve productivity.
In Q4 2013, the Company produced in Russia 3.5 million tonnes of
iron ore products compared to 4 million tonnes in Q3 2013, largely
due to the abovementioned disposal of EVRAZ VGOK. In addition, on
27 December 2013 the Company announced the sale of the Abakan and
Teya mines of Evrazruda which accounted for mined volumes of iron
ore for production of 1.7 million tonnes of iron ore concentrate in
2013. EVRAZ concluded short-term agreements with the purchaser for
primary iron ore concentrate produced by the Abakan and Teya mines.
The loss of volumes will be partially off-set in 2014 by the
ramp-up of production at other lower cost mines of Evrazruda,
including the Sheregesh mine, which are expected to add 0.5-0.6
million tonnes of iron ore concentrate in 2014.
Production of lumpy ore by EVRAZ Sukha Balka increased by 11% in
Q4 2013 compared to Q3 2013 due to improved productivity at the
Yubileynaya mine after the launch of a new loading complex.
The prices for the key iron ore product groups slightly
increased in Q4 2013 compared to the previous quarter in line with
the global price trends.
Average selling prices
USD/tonne (ex works) 2013 2012 Q4 2013 Q3 2013
-------------------------------- ----- ----- -------- --------
Concentrate, saleable (Russia) 87 84 84 82
Sinter (Russia) 76 91 76 71
Pellets (Russia) 86 91 88 82
Lumpy ore (Ukraine) 66 61 68 66
Fines ore (South Africa) 23 12 14 14
-------------------------------- ----- ----- -------- --------
COAL*
Product, '000 tonnes 2013 2012 2013/ 2012, change Q4 2013 Q3 2013 Q4 2013/ Q3 2013, change
-------------------------------- ------- ------- ------------------- -------- -------- -------------------------
Raw coking coal (mined) 18,933 15,509 22.1% 5,048 4,802 5.1%
Yuzhkuzbassugol 11,110 8,506 30.6% 3,193 2,794 14.3%
Raspadskaya 7,824 7,002 11.7% 1,855 2,008 -7.6%
Coking coal concentrate
(production) 13,664 10,983 24.4% 3,348 3,464 -3.3%
Produced at
Yuzhkuzbassugol coal
washing plants 5,821 4,102 41.9% 1,579 1,502 5.2%
Produced at EVRAZ ZSMK
coal washing plant 2,591 2,375 9.1% 657 632 4.0%
Produced at Raspadskaya
coal washing plant 5,252 4,506 16.6% 1,112 1,330 -16.4%
Raw steam coal (mined) 1,432 2,283 -37.3% 456 482 -5.4%
Steam coal concentrate
(production) 99 421 -76.5% 16 21 -25.5%
-------------------------------- ------- ------- ------------------- -------- -------- -------------------------
* 2012 data for Raspadskaya is on a pro-forma basis, as
Raspadskaya is consolidated in the results of EVRAZ from 16 January
2013
Coking coal
Both key assets of the Group in the coking coal business -
Yuzhkuzbassugol and the Raspadskaya coal company increased their
output of raw coking coal in 2013 with the consolidated output
reaching 18.9 million tonnes compared to 15.5 million tonnes in
2012 (on a pro-forma basis).
The primary drivers of the growth in output of raw coking coal
at Yuzhkuzbassugol by 31% to 11.1 million tonnes were the launch of
the new Yerunakovskaya VIII coking coal mine in February 2013
(2013: 1.4 million tonnes), the operation of the Alardinskaya mine
with two longwalls (2013: 3.3 million tonnes) and less downtime
associated with repositionings at other mines. At the same time the
Company decided to proceed with the closure of the Abashevskaya
mine due to high operating costs and risks.
The Raspadskaya coal company increased production in 2013 by 12%
to 7.8 million tonnes of raw coking coal due to increased mining
volumes at the Razrez Raspadsky open pit (+1.7 million tonnes), the
Raspadskaya Koksovaya (+0.2 million tonnes) and the MUK-96 (+0.2
million tonnes) underground mines which more than offset loss of
production volumes (-1.3 million tonnes) at the Raspadskaya
underground mine after the suspension of mining works in May-June
2013 due to excessive concentration of carbon monoxide in certain
areas of the mine.
The growth of mined volumes of coking coal by Yuzhkuzbassugol
and the Raspadskaya coal company led to increased loading rates
across all coal washing plants of the Group with the preparation
yield growing from 70.8% in 2012 to 72.2% in 2013.
In Q4 2013, raw coking coal production increased by 5% compared
to Q3 2013. The output of raw coking coal at Yuzhkuzbassugol
increased by 14% as the Yerunakovskaya VIII mine gradually ramped
up to its nameplate capacity and repositioning of a longwall at the
Alardinskaya mine in Q3 2013 was completed.
In the reporting quarter the Company stopped tunneling works at
the Abashevskaya mine and is currently in the process of the
permanent shut down of this mine. Going forward the reduction in
volumes of coking coal from Abashevskaya mine will largely be
replaced by other mines of the Group.
In Q4 2013, raw coal production by the Raspadskaya coal company
decreased by 8% compared to Q3 2013 due to repositioning of
longwalls at the MUK-96 and Raspadskaya mines.
The blended average selling price for coking coal concentrate
slightly increased from $78/t in Q3 2013 to $82/t in Q4 2013: while
the average price of coking coal concentrate produced by
Yuzhkuzbassugol remained at $89/t in Q3 and Q4 2013, the average
coking coal concentrate produced by Raspadskaya increased from
$66/t in Q3 2013 to $72/t in Q4 2013 due to higher export sales
prices.
Steam coal
In 2013, steam coal was mined by the Kusheyakovskaya mine only,
as the Gramoteinskaya steam coal mine remained suspended and was
subsequently sold in October 2013. The company also decreased the
output of steam coal concentrate due to the shift in favour of
producing more coking coal concentrate.
Average selling prices
USD/tonne (ex works) 2013 2012 Q4 2013 Q3 2013
----- ----- -------- --------
unless otherwise stated
--------------------------- ----- ----- -------- --------
Raw coking coal 58 69 55 53
Raw steam coal 30 27 31 32
Coking coal concentrate 87 136 82 78
Steam coal concentrate 50 56 - 59
--------------------------- ----- ----- -------- --------
VANADIUM
Product, tonnes of V* 2013 2012 2013/ 2012, change Q4 2013 Q3 2013 Q4 2013/ Q3 2013, change
-------------------------------- ------- ------- ------------------- -------- -------- -------------------------
Vanadium in slag (gross
production) 21,077 21,060 0.1% 5,433 4,808 13.0%
Russia 14,403 14,856 -3.0% 3,770 3,335 13.0%
South Africa 6,675 6,205 7.6% 1,663 1,473 12.9%
Vanadium in final products
(saleable)
Ferrovanadium 14,059 14,381 -2.2% 3,650 3,466 5.3%
Produced at own facilities 7,549 7,259 4.0% 1,899 1,875 1.3%
Processed at 3rd parties'
facilities 6,510 7,122 -8.6% 1,751 1,591 10.1%
Nitrovan(R) 2,294 2,723 -15.7% 435 436 -0.1%
Oxides, vanadium aluminium and
chemicals 1,648 1,330 23.9% 365 358 2.0%
-------------------------------- ------- ------- ------------------- -------- -------- -------------------------
(*) Calculated in pure vanadium equivalent.
Slag production in Russia decreased by 3% in 2013 despite the
growth of pig iron production by EVRAZ NTMK due to a decrease of
pig iron volumes produced by the duplex melting process.
In 2013, the Company focused on utilising own production
capacities as much as possible and did not require additional third
party conversion capacities to the same extent as in 2012, due to
reduced V2O5 availability. Production of ferrovanadium produced at
EVRAZ's own facilities increased by 4%.
In 2013, Nitrovan output was impacted (-16% vs. 2012) by a
labour strike at Vametco in South Africa lasting from September
until mid-October 2013 and a temporary suspension of operations in
the plant initiated by the South African Department of Mineral
Resourses, which lasted for two weeks in November-December
2013.
Production of oxides, vanadium aluminum and chemicals increased
by 24% in 2013 compared to 2012 due to a resolution of feedstock
supply issues faced during 2012.
In Q4 2013, EVRAZ's total production of vanadium in slag
increased by 13% compared to Q3 2013, as a result of a higher pig
iron production at EVRAZ NTMK in Russia and EVRAZ Highveld Steel
and Vanadium in South Africa.
Production of oxides, vanadium aluminum and chemicals remained
broadly unchanged in Q4 2013 vs Q3 2013.
Average prices for vanadium products increased in 2013 compared
to 2012, largely due to sustained high prices in the first quarter
driven by improved sentiment.
Average selling prices
USD/tonne of V (ex works) 2013 2012 Q4 2013 Q3 2013
------------------------------------------ ------- ------- -------- --------
Ferrovanadium 26,581 24,062 24,525 25,185
Nitrovan(R) 28,945 27,900 26,507 27,856
Oxides, vanadium aluminium and chemicals 34,295 32,579 35,444 32,854
------------------------------------------ ------- ------- -------- --------
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 Ukraine they also include railway
products, for Europe - slabs and cut shapes; for South Africa -
rails.
###
For further information:
Media Relations:
Vsevolod Sementsov
VP, Corporate Communications
London: +44 207 832 8998 Moscow: +7 495 937 6871
media@evraz.com
Investor Relations:
Sergey Belyakov
Director, 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 the Russian Federation, Ukraine, USA,
Canada, Czech Republic, Italy and South Africa. EVRAZ is among the
top steel producers in the world based on crude steel production of
15.9 million tonnes in 2012. In 2012 EVRAZ sold 15.3 million tonnes
of steel products. 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 2012 were US$14,726 million, and consolidated EBITDA
amounted to US$2,012 million. The H1 2013 consolidated revenue was
US$7,362 million and the H1 2013 EBITDA was US$939 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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