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PJSC Magnitogorsk Iron and Steel Works / Trading Statement
PJSC Magnitogorsk Iron and Steel Works: MMK Group Trading Update for Q2 and
H1 2017
17-Jul-2017 / 13:32 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EquityStory.RS,
LLC - a company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
*MMK Group Trading Update for Q2 and H1 2017
??? Group: Operational highlights *
(thousand tonnes)
*Q2 2017* *Q1 2017* *%* *H1 *H1 2016* *%*
2017*
*??? *3,182* *3,066* *3.8%* *6,248* *6,208* *0.6%*
Group
crude
steel*
*???
Group
steel
products* *2,882* *2,723* *5.9%* *5,605* *5,791* *-3.2%*
MMK steel 2,780 2,675 4.0% 5,455 5,644 -3.4%
products
MMK-Metiz
steel
products 111 104 6.9% 215 199 7.9%
??? 253 210 20.7% 463 415 11.4%
Metalurji
steel
products
_MMK
Group HVA
products_ _1,287_ _1,313_ _-1.9%_ _2,600_ _2,669_ _-2.6%_
_MMK _44.7%_ _48.2%_ _46.4%_ _46.1%_
Group HVA
products
share_
*Belon *699* *609* *14.8%* *1,308* *1,423* *-8.1%*
coal
concentra
te*
*Iron *912* *691* *32.0%* *1,604* *1,626* *-1.3%*
ore*
*Q2 2017 highlights vs. Q1 2017 *
- MMK Group's total crude steel output in Q2 2017 totalled 3,182 thousand
tonnes (up 3.8% q-o-q). Overall steelmaking capacity utilisation at the main
Magnitogorsk site (excluding planned maintenance) in Q2 2017 exceeded 90%.
- MMK Group's total finished steel product shipments in Q2 2017 (excluding
intra-group sales) amounted to 2,882 thousand tonnes (up 5.9% q-o-q).
- MMK Group's HVA steel product output in Q2 2017 was 1,287 thousand tonnes
(down 1.9% q-o-q). The share of HVA products in total output was 44.7%.
- Production of coal concentrate by Belon in Q2 2017 totalled 699 thousand
tonnes (up 14.8% q-o-q).
*H1 2017 highlights vs. H1 2016*
- MMK Group's total crude steel output in H1 2017 totalled 6,248 thousand
tonnes (up 0.6% y-o-y). Overall steelmaking capacity utilisation at the main
Magnitogorsk site (excluding planned maintenance) in H1 2017 exceeded 92%.
- MMK Group's total finished steel product shipments in H1 2017 (excluding
intra-group sales) amounted to 5,605 thousand tonnes (down 3.2% y-o-y).
- MMK Group's HVA steel product output in H1 2017 was 2,600 thousand tonnes
(down 2.6% y-o-y). The share of HVA products in total output rose to 46.4%.
- Production of coal concentrate by Belon in H1 2017 totalled 1,604 thousand
tonnes (down 1.3% y-o-y).
*MMK Group highlights by key segments
Steel segment (Russia) *
(thousand tonnes)
*Q2 2017* *Q1 2017* *%* *H1 *H1 *%*
2017* 2016*
*Pig iron* *2,578* *2,372* *8.7%* *4,95 *4,85 *1.9%*
0* 9*
*Crude steel* *3,182* *3,066* *3.8%* *6,24 *6,20 *0.6%*
8* 8*
*Finished *2,780* *2,675* *4.0%* *5,45 *5,64 *-3.4%*
products output, 5* 4*
of which:*
Slabs and 0 0 *-* 0 83 -
billets
Long products 460 439 4.8% 899 866 3.8%
Flat hot-rolled 1,356 1,197 13.3% 2,553 2,575 -0.9%
products
HVA products, of 964 1,039 -7.2% 2,003 2,119 -5.5%
which:
Thick plate 193 231 -16.8% 424 456 -7.1%
(mill 5000)
Flat cold-rolled 286 352 -18.9% 638 734 -13.1%
products
Downstream 486 455 6.8% 941 929 1.3%
products, of
which:
Tin plate 29 37 -22.2% 66 79 -16.1%
Galvanised steel 251 258 -3.6% 511 552 -7.5%
Polymer-coated 119 89 34.1% 208 178 16.8%
steel
Band 34 27 23.5% 61 63 -3.8%
Formed section 33 24 38.6% 57 16 248.4%
Pipes 20 18 14.0% 38 40 -4.8%
*Shipments by
market:*
Russia + CIS *2,079* *1,911* *8.8%* *3,99 *4,11 *-3.0%*
0* 5*
Export *701* *764* *-8.2%* *1,46 *1,52 *-4.2%*
5* 9*
(USD / tonne)
*Q2 2017* *Q1 *%* *H1 *H1 *%*
2017* 2017* 2016*
*Average price *556* *573* *-3.0%* *565* *384* *47.1%*
per tonne:*
Long products 457 469 -2.6% 462 311 48.9%
Flat hot-rolled 471 494 -4.7% 482 315 52.9%
products
HVA products, 724 708 2.2% 716 502 42.4%
of which:
Thick plate 778 708 9.8% 740 574 28.9%
(mill 5000)
Flat hot-rolled 567 585 -3.1% 578 370 56.3%
products
Downstream 794 803 -1.1% 798 572 39.5%
products, of
which:
Tin plate 844 889 -5.0% 871 738 18.0%
Galvanised 750 762 -1.5% 756 531 42.5%
steel
Polymer-coated 932 971 -4.0% 947 711 33.1%
steel
Band 689 693 0.4% 687 459 49.7%
Formed section 813 776 4.7% 795 508 56.4%
Pipes 604 610 -1.0% 606 405 49.8%
- Pig iron output in Q2 2017 grew 8.7% q-o-q and totalled 2,578 thousand
tonnes. This was due to the completion of scheduled maintenance at blast
furnace No 10 in Q1 2017.
- Crude steel output in Q2 2017 increased by 3.8% q-o-q to 3,182 thousand
tonnes. Higher pace of growth of pig iron production allowed to increase
share of pig iron in steel which resulted in lower costs.
- In Q2 2017, sales of finished products totalled 2,780 thousand tonnes, up
4.0% q-o-q. This increase was mainly due to the completion of maintenance at
rolling facilities and the seasonal recovery of business activity on the
domestic market.
- Stronger demand for steel on the domestic market in Q2 2017 as compared to
Q1 2017 resulted in an 8.8% increase in sales and an increase in the share
of domestic sales in the overall sales structure to 74.8% (up from 71.4% in
Q1 2017).
- In Q2 2017, sales of long products increased by 4.8% q-o-q to 460 thousand
tonnes, mainly due to the current sales mix and higher sales of MMK-Metiz
products.
- The 13.3% increase in sales of hot-rolled products q-o-q in Q2 2017 was
mainly due to the completion of scheduled maintenance at oxygen converter
and hot-rolling mill 2000, as well as higher sales to pipemakers.
- Sales of HVA products in Q2 2017 decreased q-o-q due to lower sales of
cold-rolled products and mill 5000 thick plate. At the same time, sales
volumes of downstream products grew 6.8% q-o-q.
- Sales of cold-rolled products in Q2 2017 decreased by 18.9% q-o-q to 286
thousand tonnes due to lower sales to semi-integrated works (as stock levels
at traders' warehouses were still high) and higher output of polymer-coated
steel. Sales volumes of cold-rolled products to carmakers remained strong.
- In Q2 2017, sales of mill 5000 thick plate declined by 38 thousand tonnes
(down 16.8% q-o-q) to 193 thousand tonnes. This was driven by a shift in the
products mix towards more sophisticated, less efficient yet more high-margin
steel grades. This change is well-illustrated by a 9.8% increase in the
average price of the mill 5000 products over the quarter, amid a decrease of
3.0% in the average price of the overall product mix over the same period.
- Capacity utilisation at coated-product facilities remained at nearly 100%
in Q2 2017. Lower shipments of galvanised steel (down 3.6% q-o-q) was due to
high demand for polymer-coated steel (sales were up 34.1% q-o-q).
- Sales of formed section in Q2 2017 grew 38.6% q-o-q due to consistently
high demand from railcar producers.
- The average sales price in US dollars in Q2 2017 decreased by 3.0% q-o-q
to USD 556 per tonne. This decline was mainly due to the correction of
domestic prices following a drop in global commodity prices and the
appreciation of the RUB against the USD.
*Steel segment (Turkey) *
(thousand tonnes)
*Q2 2017* *Q1 *%* *H1 *H1 *%*
2017* 2017* 2016*
*??? Metalurji *253* *210* *20.7%* *463* *415* *11.4%*
finished
products, of
which:*
Flat hot-rolled 41 40 3.6% 81 65 24.0%
products
HVA products, 212 170 24.7% 382 350 9.1%
of which:
Galvanised 167 132 26.6% 299 242 23.7%
steel
Polymer-coated 45 38 18.4% 83 108 -23.7%
steel
*??? Metalurji *154* *163* *-5.5%* *317* *271* *16.9%*
finished output
from ??? steel*
- Sales of finished products in Q2 2017 totalled 253 thousand tonnes (up
20.7% q-o-q). The increase in sales was due to a recovery of business
activity following the stabilisation of the political situation in the
country, as well as seasonally higher demand.
- Sales of finished products in H1 2017 grew 48 thousand tonnes or 11.4%
y-o-y.
- This growth was mainly due to an increase in sales of galvanised steel by
57 thousand tonnes or 23.7% (thanks to optimisation of the product mix),
which had higher profitability of sales in the current environment.
- Stabilization of the political situation in the country, high domestic
demand and an increase in export sales mean higher sales expectations in
2017 as compared to 2016.
*Coal segment *
(thousand tonnes)
*Q2 2017* *Q1 *%* *H1 *H1 *%*
2017* 2017* 2016*
*Coking coal *855* *779* *9.8%* *1,634* *1,482* *10.3%*
mining*
(MORE TO FOLLOW) Dow Jones Newswires
July 17, 2017 07:32 ET (11:32 GMT)
