28th Jul 2008 08:51
Severstal Releases H1 2008 Operational Results
July 28, 2008 - Severstal (LSE: SVST) today released its H1 2008 operational results as follows.
PRODUCTION VOLUMES
H1 2008 overview
Production of crude steel in Q2 2008 was 5.3 million tonnes, 10% higher than in the previous quarter. Production of rolled products rose 13% to 4 million tonnes. Total production of iron ore pellets was 4% lower than in Q1 2008, iron ore concentrate production was up by 11% and coking coal concentrate production rose by 1%.
Consolidated production of hot metal and crude steel
|
Total throughput, metric tonnes |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Hot metal: total throughput |
6,607,432 |
6,982,527 |
6% |
3,272,800 |
3,709,728 |
13% |
|
Crude steel: total throughput |
9,013,268 |
10,065,841 |
12% |
4,794,863 |
5,270,978 |
10% |
Consolidated production (net of intercompany sales)
|
Production for sale, metric tonnes |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Coal: |
2,692,655 |
1,537,174 |
-43% |
755,982 |
781,192 |
3% |
|
Coking coal concentrate |
1,441,960 |
666,861 |
-54% |
289,337 |
377,524 |
30% |
|
Coking coal |
47,729 |
61,776 |
29% |
44,617 |
17,159 |
-62% |
|
Steam coal |
1,202,966 |
808,537 |
-33% |
422,028 |
386,509 |
-8% |
|
Iron ore: |
1,929,431 |
2,571,592 |
33% |
1,534,309 |
1,037,283 |
-32% |
|
Iron ore pellets |
1,929,431 |
2,222,482 |
15% |
1,310,939 |
911,543 |
-30% |
|
Iron ore concentrate |
0 |
349,110 |
n.a. |
223,371 |
125,739 |
-44% |
|
Gold |
0 |
2,035 |
n.a. |
900 |
1,135 |
26% |
|
Semifinished products |
974,401 |
1,055,813 |
8% |
521,542 |
534,271 |
2% |
|
Rolled products: |
6,845,289 |
7,569,229 |
11% |
3,547,463 |
4,021,766 |
13% |
|
Hot-rolled strip and plate |
3,086,055 |
3,320,843 |
8% |
1,571,522 |
1,749,321 |
11% |
|
Cold-rolled sheet |
958,099 |
1,150,718 |
20% |
518,667 |
632,051 |
22% |
|
Galvanised and other metallic coated sheet |
728,979 |
940,486 |
29% |
394,276 |
546,210 |
39% |
|
Color coated sheet |
121,440 |
123,630 |
2% |
58,467 |
65,163 |
11% |
|
Long products |
1,792,950 |
1,870,340 |
4% |
916,633 |
953,707 |
4% |
|
Rails |
157,766 |
163,213 |
3% |
87,899 |
75,314 |
-14% |
|
Downstream products: |
964,442 |
986,576 |
2% |
469,816 |
516,760 |
10% |
|
Metalware products |
588,709 |
555,849 |
-6% |
269,745 |
286,104 |
6% |
|
Large diameter pipes |
104,878 |
186,698 |
78% |
78,049 |
108,649 |
39% |
|
Other tubes and pipes, formed shapes |
233,658 |
244,030 |
4% |
122,023 |
122,007 |
0% |
|
Wheels, axles, tires |
37,197 |
0 |
n.a. |
0 |
0 |
n.a. |
Segmental information
Mining
|
Production for sale, metric tonnes |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Coal: |
5,268,815 |
3,551,244 |
-33% |
1,814,800 |
1,736,444 |
-4% |
| Coal (Vorkutaugol) |
4,259,312 |
3,192,674 |
-25% |
1,456,230 |
1,736,444 |
19% |
| Coal (Kuzbassugol) |
1,009,503 |
358,570* |
n.a. |
358,570 |
0* |
n.a. |
|
Coking coal concentrate |
3,036,692 |
2,377,683 |
-22% |
1,185,770 |
1,191,913 |
1% |
| Coking coal concentrate (Vorkutaugol) |
2,142,340 |
2,051,561 |
-4% |
859,648 |
1,191,913 |
39% |
| Coking coal concentrate (Kuzbassugol) |
894,352 |
326,122* |
n.a. |
326,122 |
0* |
n.a. |
|
Coking coal |
1,029,157 |
365,024 |
-65% |
207,001 |
158,023 |
-24% |
| Coking coal (Vorkutaugol) |
914,006 |
332,576 |
-64% |
174,553 |
158,023 |
-9% |
| Coking coal (Kuzbassugol) |
115,151 |
32,448 |
-72% |
32,448 |
0* |
n.a. |
|
Steam coal |
1,202,966 |
808,537 |
-33% |
422,028 |
386,509 |
-8% |
|
Iron ore: |
7,093,011 |
7,573,694 |
7% |
3,778,094 |
3,795,600 |
0% |
|
Iron ore pellets |
4,814,073 |
5,150,663 |
7% |
2,627,162 |
2,523,501 |
-4% |
|
Iron ore concentrate |
2,278,938 |
2,423,031 |
6% |
1,150,932 |
1,272,099 |
11% |
|
Gold |
0 |
2,035 |
n.a. |
900 |
1,135 |
26% |
* In April 2008, we sold Kuzbassugol to Arcelor Mittal.
Russian Steel
|
Total throughput, metric tonnes |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Hot metal: total throughput |
4,368,830 |
4,540,958 |
4% |
2,311,162 |
2,229,796 |
-4% |
|
Crude steel: total throughput |
5,946,212 |
6,261,603 |
5% |
3,186,508 |
3,075,095 |
-3% |
|
Production for sale, metric tonnes |
||||||
|
Semifinished products |
495,221 |
445,853 |
-10% |
239,420 |
206,433 |
-14% |
|
Rolled products: |
4,695,054 |
4,911,419 |
5% |
2,393,822 |
2,517,597 |
5% |
|
Hot-rolled strip and plate |
2,454,286 |
2,656,867 |
8% |
1,272,165 |
1,384,702 |
9% |
|
Cold-rolled sheet |
730,793 |
735,720 |
1% |
367,800 |
367,920 |
0% |
|
Galvanised and other metallic coated sheet |
378,509 |
369,091 |
-2% |
181,178 |
187,913 |
4% |
|
Color coated sheet |
121,440 |
118,669 |
-2% |
58,467 |
60,202 |
3% |
|
Long products |
1,010,026 |
1,031,072 |
2% |
514,213 |
516,859 |
1% |
|
Downstream products: |
253,172 |
266,214 |
5% |
133,924 |
132,290 |
-1% |
|
Metalware products |
19,514 |
22,184 |
14% |
11,901 |
10,283 |
-14% |
|
Other tubes and pipes, formed shapes |
233,658 |
244,030 |
4% |
122,023 |
122,007 |
0% |
North America**
|
Total throughput, metric tonnes |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Hot metal: total throughput |
955,602 |
1,191,106 |
25% |
331,488 |
859,618 |
159% |
|
Crude steel: total throughput |
1,153,496 |
2,029,528 |
76% |
711,443 |
1,318,085 |
85% |
| Crude steel (Dearborn) |
1,153,496 |
901,795 |
-22% |
389,323 |
512,471 |
32% |
| Crude steel (Columbus) |
0 |
684,461 |
n.a. |
322,120 |
362,341 |
12% |
| Crude steel (Sparrows Point) |
0 |
443,272 |
n.a. |
0 |
443,272 |
n.a. |
|
Production for sale, metric tonnes |
||||||
|
Semifinished products |
0 |
99,519 |
n.a. |
0 |
99,519 |
n.a. |
|
Rolled products: |
1,293,020 |
1,868,688 |
45% |
746,983 |
1,121,705 |
50% |
| Rolled products (Dearborn) |
1,269,309 |
952,642 |
-25% |
431,267 |
521,376 |
21% |
| Rolled products (Columbus) |
23,711 |
652,480 |
n.a. |
315,716 |
336,763 |
7% |
| Rolled products (Sparrows Point) |
0 |
263,566 |
n.a. |
0 |
263,566 |
n.a. |
|
Hot-rolled strip and plate |
715,244 |
877,333 |
23% |
383,017 |
494,316 |
29% |
|
Cold-rolled sheet |
227,306 |
414,997 |
83% |
150,867 |
264,130 |
75% |
|
Galvanised and other metallic coated sheet |
350,470 |
571,395 |
63% |
213,098 |
358,297 |
68% |
** SNA, Severcorr (consolidated beginning Q1 2008), Sparrows Point (consolidated beginning Q2 2008)
Lucchini
|
Total throughput, metric tonnes |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Hot metal and pig iron: total throughput |
1,283,000 |
1,250,464 |
-3% |
630,150 |
620,314 |
-2% |
|
Crude steel: total throughput |
1,913,560 |
1,774,710 |
-7% |
896,912 |
877,798 |
-2% |
| Crude steel (Piombino) |
1,257,707 |
1,159,235 |
-8% |
586,515 |
572,720 |
-2% |
| Crude steel (Ascometal) |
655,853 |
615,475 |
-6% |
310,397 |
305,078 |
-2% |
|
Production for sale, metric tonnes |
||||||
|
Semifinished products |
601,606 |
525,188 |
-13% |
282,121 |
243,066 |
-14% |
|
Rolled products: |
1,262,240 |
1,292,645 |
2% |
634,756 |
657,890 |
4% |
| Rolled products (Piombino) |
802,466 |
843,788 |
5% |
414,756 |
429,033 |
3% |
| Rolled products (Ascometal) |
459,774 |
448,857 |
-2% |
220,000 |
228,857 |
4% |
|
Long products |
1,104,474 |
1,129,432 |
2% |
546,857 |
582,576 |
7% |
|
Rails |
157,766 |
163,213 |
3% |
87,899 |
75,314 |
-14% |
|
Downstream products: |
59,233 |
17,312 |
-71% |
6,653 |
10,659 |
60% |
|
Metalware products |
22,036 |
17,312 |
-21% |
6,653 |
10,659 |
60% |
|
Wheels, axles, tires |
37,197 |
0 |
n.a. |
0 |
0 |
n.a. |
Metalware
|
Production for sale, metric tonnes |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Downstream products: |
||||||
|
Metalware products |
547,159 |
516,354 |
-6% |
251,191 |
265,163 |
6% |
Izhora pipe mill
|
Production for sale, metric tonnes |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Downstream products: |
||||||
|
Large diameter pipes |
104,878 |
186,697 |
78% |
78,049 |
108,649 |
39% |
AVERAGE SELLING PRICES
Consolidated sales
|
Sales prices (EXW), USD/tonne |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Coal: |
55 |
104 |
89% |
91 |
118 |
30% |
|
Coking coal concentrate |
81 |
139 |
72% |
123 |
155 |
26% |
|
Coking coal |
31 |
48 |
55% |
47 |
49 |
4% |
|
Steam coal |
26 |
33 |
27% |
32 |
34 |
6% |
|
Iron ore: |
69 |
96 |
39% |
91 |
101 |
11% |
|
Iron ore pellets |
75 |
105 |
40% |
97 |
112 |
15% |
|
Iron ore concentrate |
58 |
78 |
34% |
77 |
79 |
3% |
|
Gold |
0 |
29,196 |
n.a. |
29,671 |
28,422 |
-4% |
|
Semifinished products |
||||||
|
Rolled products: |
713 |
881 |
24% |
769 |
983 |
28% |
|
Hot-rolled strip and plate |
592 |
760 |
28% |
640 |
867 |
35% |
|
Cold-rolled sheet |
670 |
778 |
16% |
686 |
864 |
26% |
|
Galvanised and other metallic coated sheet |
896 |
954 |
6% |
869 |
1,020 |
17% |
|
Color coated sheet |
1,201 |
1,325 |
10% |
1,192 |
1,450 |
22% |
|
Long products |
805 |
1,041 |
29% |
900 |
1,179 |
31% |
|
Rails |
735 |
945 |
29% |
901 |
990 |
10% |
|
Downstream products: |
1,001 |
1,344 |
34% |
1,148 |
1,520 |
32% |
|
Metalware products |
937 |
1,199 |
28% |
1,045 |
1,343 |
29% |
|
Large diameter pipes |
1,494 |
2,335 |
56% |
2,051 |
2,543 |
24% |
|
Other tubes and pipes, formed shapes |
768 |
937 |
22% |
810 |
1,061 |
31% |
|
Wheels, axles, tires |
2,683 |
0 |
n.a. |
0 |
0 |
n.a. |
Mining
|
Sales prices (EXW), USD/tonne |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Coal: |
55 |
104 |
89% |
91 |
118 |
30% |
|
Coking coal concentrate |
81 |
139 |
72% |
123 |
155 |
26% |
|
Coking coal |
31 |
48 |
55% |
47 |
49 |
4% |
|
Steam coal |
26 |
33 |
27% |
32 |
34 |
6% |
|
Iron ore: |
69 |
96 |
39% |
91 |
101 |
11% |
|
Iron ore pellets |
75 |
105 |
40% |
97 |
112 |
15% |
|
Iron ore concentrate |
58 |
78 |
34% |
77 |
79 |
3% |
|
Gold |
0 |
29,196 |
n.a. |
29,671 |
28,422 |
-4% |
Russian Steel
|
Sales prices (EXW), USD/tonne |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Semifinished products |
408 |
618 |
51% |
502 |
731 |
46% |
|
Rolled products: |
651 |
818 |
26% |
687 |
940 |
37% |
|
Hot-rolled strip and plate |
596 |
794 |
33% |
665 |
907 |
36% |
|
Cold-rolled sheet |
653 |
774 |
19% |
680 |
877 |
29% |
|
Galvanised and other metallic coated sheet |
915 |
987 |
8% |
877 |
1,093 |
25% |
|
Color coated sheet |
1,201 |
1,315 |
9% |
1,192 |
1,441 |
21% |
|
Long products |
592 |
791 |
34% |
618 |
964 |
56% |
|
Downstream products: |
772 |
934 |
21% |
812 |
1,054 |
30% |
|
Metalware products |
814 |
910 |
12% |
837 |
979 |
17% |
|
Other tubes and pipes, formed shapes |
768 |
937 |
22% |
810 |
1,061 |
31% |
North America**
|
Sales prices (EXW), USD/tonne |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Rolled products: |
698 |
801 |
15% |
710 |
869 |
22% |
|
Hot-rolled strip and plate |
600 |
713 |
19% |
622 |
790 |
27% |
|
Cold-rolled sheet |
725 |
786 |
8% |
702 |
843 |
20% |
|
Galvanised and other metallic coated sheet |
874 |
932 |
7% |
863 |
979 |
13% |
** SNA, Severcorr (consolidated beginning Q1 2008), Sparrows Point (consolidated beginning Q2 2008)
Lucchini
|
Sales prices (EXW), USD/tonne |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Semifinished products |
584 |
653 |
12% |
592 |
728 |
23% |
|
Rolled products: |
969 |
1,232 |
27% |
1,132 |
1,330 |
17% |
|
Long products |
1,004 |
1,271 |
27% |
1,163 |
1,375 |
18% |
|
Rails |
735 |
945 |
29% |
901 |
990 |
10% |
|
Downstream products: |
2,632 |
1,172 |
-55% |
1,121 |
1,207 |
8% |
|
Metalware products |
2,571 |
1,172 |
-54% |
1,121 |
1,207 |
8% |
|
Wheels, axles, tires |
2,683 |
0 |
n.a. |
0 |
0 |
n.a. |
Metalware
|
Sales prices (EXW), USD/tonne |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Downstream products: |
||||||
|
Metalware products |
875 |
1,213 |
39% |
1,053 |
1,365 |
30% |
Izhora pipe mill
|
Sales prices (EXW), USD/tonne |
H1 2007 |
H1 2008 |
H1 2008/ H1 2007 |
Q1 2008 |
Q2 2008 |
Q2 2008/ Q1 2008 |
|
Downstream products: |
||||||
|
Large diameter pipes |
1,494 |
2,335 |
56% |
2,051 |
2,543 |
24% |
Comments
The sale of Kuzbassugol was completed in the beginning of April. The impact of the disposal was almost fully offset by a 19% increase in coal production at Vorkutaugol in Q2, resulting in total coal production decline by only 4% quarter-on-quarter. The 19% rise in coal production at Vorkutaugol was primarily due to the solving of geological problems which had impacted coal production in Q1. Vorkutaugol also changed its product mix in Q2 in favour of coking coal concentrate. The production of low grade coal and steam coal reduced due to a seasonal decline in consumption.
Production of iron ore was stable in Q2. Iron ore concentrate output at Olkon rose by 11% and the production of iron ore pellets at Karelsky Okatysh reduced by 4%. Net of intercompany sales pellets sales reduced by 30% and iron ore concentrate sales dropped by 44%. This was due to an increase in intercompany pellets sales (particularly due to shipments to Lucchini's mills in Europe) and a temporary fall in iron ore concentrate shipments to the Cherepovets steel mill in Q1 resulting in Olkon sales to the market. Following Cherepovets steel mill's concentrate consumption growth, Olkon increased intercompany shipments in Q2.
Production of gold grew by 26% quarter-on-quarter due to seasonal factors. The increase mostly came from Aprelkovo and Celtic mines.
Production of crude steel at Russian Steel decreased by 3% due to repair works in a converter shop and blast furnace №4 resulting in a 14% fall in the production of semifinished products (mainly slabs). Production of all other products (with the exception of metalware products) increased. Production of hot rolled strip and plates increased the most - by 9% quarter-on-quarter.
Production of crude steel in North America rose significantly, by 85% quarter-on-quarter. The acquisition of Sparrows Point, completed in Q2, contributed to this. Production at Dearborn and Columbus increased by 32% and 12% respectively. This was due to favorable pricing and increased demand in North America as well as the continuing ramp-up of Blast furnace "C" at Dearborn.
Production of crude steel at Lucchini fell by 2%, resulting in a slight reduction of slab and rails production, while long products (especially wire rods) throughput rose by 7%.
With repair works completed at Izhora Pipe mill in Q1 the production of large diameter pipes increased by 39% in Q2 2008.
Weighted average selling prices increased across the business, with the exception of gold, which fell by 4% reflecting the relative volatility of gold prices in the market. Severstal steel prices have changed in line with those in the wider steel market. The biggest growth (56%) came from long products at Russian Steel. The appreciation of the Russian ruble also played a role.
Note:
Semifinished products include slabs, billets, ingots, steel casting and forgings.
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