DJ PJSC Magnitogorsk Iron and Steel Works: MMK Group Trading Update for Q4 and 12M 2021
PJSC Magnitogorsk Iron and Steel Works (MMK) PJSC Magnitogorsk Iron and Steel Works: MMK Group Trading Update for Q4 and 12M 2021 28-Feb-2022 / 07:10 CET/CEST Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
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PJSC Magnitogorsk Iron & Steel Works ("MMK", or the "Group") (MICEX-RTS: MAGN; LSE: MMK), one
of the world's largest steel producers, is pleased to announce its Trading Update for Q4 and
MMK Group trading 12M 2021.
update for Q4 and 12m
2021
28 february 2022
Magnitogorsk, Russia
-- Pig iron output decreased by 1.5% quarter-on-quarter (q-o-q) to 2,583 thousand tonnes due
to the shutdown of Blast Furnace No. 9 for an overhaul at year-end.
-- Steel output increased by 3.3% q-o-q to 3,501 thousand tonnes, reflecting a higher steel
output at the Turkish asset in line with announced plans.
HIGHLIGHTS -- MMK Group's sales of metal products increased by 26.6% q-o-q to 3,495 thousand tonnes,
driven by favourable market conditions, higher production volumes at the Turkish asset and run-down
Q4 2021 inventories.
VS Q3 2021
-- MMK Group's sales of premium products were up 19.8% to 1,452 thousand tonnes, driven
primarily by higher sales of cold-rolled products and Mill 5000 thick plate.
-- MMK Coal's coal concentrate production totalled 888 thousand tonnes, up 2.5% q-o-q, due
to the increased processing of own coals.
HIGHLIGHTS
-- Pig iron output increased by 11.5% year-on-year (y-o-y) to 10,420 thousand tonnes as no
12M 2021 long-lasting overhauls took place at blast furnace operations.
VS 12M 2020
-- Steel output increased by 17.4% y-o-y to 13,592 thousand tonnes, as converter facilities
were not being overhauled during this period, and the electric arc furnace facility was launched at
the Turkish asset.
-- MMK Group's sales of metal products increased by 16.0% y-o-y to 12,480 thousand tonnes,
driven by favourable market conditions and the high utilisation rate of Mill 2500 after its
modernisation in 2020.
-- Sales of premium products grew by 1.3% y-o-y to 5,211 thousand tonnes amid strong demand
for galvanised steel in export markets.
-- Production of coal concentrate increased by 12.6% y-o-y to 3,445 thousand tonnes, driven
by stronger demand from MMK amid favourable market conditions.
Global steel products market: In Q4 2021, rolled steel prices in the global market continued their
correction, reflecting the impact of earlier imbalances between supply and demand on the back of an
increase in steel output outside China. In China, production declined rapidly in the fourth quarter,
following the dynamics of domestic demand, leading to a 3% y-o-y reduction in steel output.
Russian steel products market: In Russia, prices in the secondary market for rolled products in Q4 20201
bounced following their correction in the third quarter reflecting robust end use demand on the back of
lower steel inventories of trading companies.
Global iron ore market: In the beginning of the fourth quarter, the 62% Fe index declined, reaching a low
at about USD 85 per tonne CFR China. During that period, caps on steel output in China drove a decrease
in the end use demand for iron ore and an increase in inventories of it at Chinese ports. However, the
recovery of China's pig iron production that started in December, coupled with projected further growth
in spring 2022, resulted in rising demand in China and growing iron ore prices.
MARKET Russian iron ore market: Due to weaker demand from Chinese steelmakers and delays at border crossings
OVERVIEW with China, the availability of concentrate in the domestic market increased in the fourth quarter. In
the blast furnace pellet and direct reduced iron pellet segment, the Russian market remained balanced
amid stable exports.
Global coking coal market: In the middle of the fourth quarter, China's domestic prices and import prices
fell by about 40% in a single month. The trend spread to other markets around the world, but was halted
by weather issues in Australia, where the cyclone season limited logistics and exports in December. By
2021-end, prices continued upwards on the back of unfavourable weather forecasts.
Russian coking coal market: Prices for the fourth quarter in Russia rose dramatically, driven by the
rapid growth of global prices in the third quarter. After the price correction in China in November, some
Russian consumers negotiated lower prices under certain agreements within the period.
Russian metal scrap market: In the fourth quarter, the choppy price action persisted, reflecting rebar
price volatility in Russia. By 2021-end, Russian steelmakers had accumulated sufficient inventories of
raw materials, triggering a correction.
MMK GROUP'S CONSOLIDATED RESULTS
thousand tonnes Q4 2021 Q3 2021 % 12M 2021 12M 2020 % Crude steel production 3,501 3,390 3.3 13,592 11,574 17.4 Steel segment Russia 3,246 3,331 - 2.6 13,278 11,574 14.7 Steel segment Turkey 255 59 334.2 314 - - Pig iron production 2,583 2,624 - 1.5 10,420 9,344 11.5 Coal concentrate production 888 867 2.5 3,445 3,059 12.6 Iron ore production 691 802 - 13.8 2,913 2,893 0.7 Finished products sales, 3,495 2,761 26.6 12,480 10,755 16.0 including: Slabs and billets 22 45 - 51.4 194 20 885.5 Long products 327 249 31.4 1,161 1,275 - 9.0 Flat hot-rolled products 1,694 1,255 35.0 5,914 4,317 37.0 Premium products, including: 1,452 1,213 19.8 5,211 5,143 1.3 Thick plate (Mill 5000) 250 164 52.6 829 841 - 1.4 Flat cold-rolled products 300 186 61.8 873 889 - 1.8 Downstream products, including: 903 864 4.5 3,509 3,414 2.8 Tinplate 40 42 - 6.7 169 168 0.1 Galvanised steel 502 514 - 2.2 1,992 1,735 14.8 Polymer-coated steel 175 131 34.0 614 717 - 14.3 Band 37 30 22.7 137 130 4.9 Formed section 11 21 - 47.1 76 122 - 38.1 Pipe 21 14 46.3 72 83 - 13.2 Metalware 114 109 4.5 438 418 4.8 Other metal products 3 2 21.2 11 39 - 72.2 Share of premium products 41.6% 43.9% 41.8% 49.3%
CONSOLIDATED PRICES
FOR METAL PRODUCTS
USD/tonne Q4 2021 Q3 2021 % 12M 2021 12M 2020 %
Average price per tonne: 919 1,057 - 13.1 909 558 62.9
Slabs and billets 578 612 - 5.6 601 255 135.7
Long products 792 845 - 6.3 758 472 60.6
Flat hot-rolled products 820 942 - 13.0 818 479 70.8
Premium products, including: 1,069 1,237 - 13.6 1,057 646 63.6
Thick plate (Mill 5000) 862 918 - 6.1 799 595 34.3
Flat cold-rolled products 939 1,088 - 13.7 938 558 68.1
Downstream products, including: 1,169 1,329 - 12.0 1,147 682 68.2
Tinplate 1,145 1,109 3.2 955 711 34.3
Galvanised steel 1,171 1,356 - 13.6 1,156 656 76.2
Polymer-coated steel 1,328 1,605 - 17.3 1,376 804 71.1
Band 1,002 1,207 - 17.0 1,001 607 64.9
Formed section 1,005 1,156 - 13.1 1,033 659 56.8
Pipe 823 1,004 - 18.0 888 521 70.4
Metalware 1,050 1,058 - 0.8 958 629 52.3
Other metal products 1,600 1,763 - 9.2 1,486 708 109.9
- 13.1% Q-o-Q
Average selling prices for Q4 2021 reduced by 13.1% q-o-q to USD 919 per tonne, reflecting a correction
AVERAGE of global prices for metal products and a slowdown in global demand. In 12M 2021, prices grew by 62.9%
SELLING PRICE y-o-y to USD 909 per tonne, driven by an increase in global steel demand and market indices amid last
year's low base.
MMK GROUP'S PERFORMANCE
ACROSS CORE SEGMENTS
STEEL SEGMENT RUSSIA
thousand tonnes Q4 2021 Q3 2021 % 12M 2021 12M 2020 %
Crude steel production 3,246 3,331 - 2.6 13,278 11,574 14.7
Pig iron production 2,583 2,624 - 1.5 10,420 9,344 11.5
Finished products sales, 3,144 2,692 16.8 11,977 10,268 16.6
including:
Slabs and billets 22 45 - 51.4 194 20 885.5
Long products 327 249 31.4 1,161 1,275 - 9.0
Flat hot-rolled products 1,577 1,396 13.0 6,264 4,542 37.9
Premium products, including: 1,218 1,003 21.4 4,359 4,431 - 1.6
Thick plate (Mill 5000) 250 164 52.6 829 841 - 1.4
Flat cold-rolled products 311 199 56.4 896 899 - 0.3
Downstream products, including: 658 641 2.6 2,633 2,692 - 2.2
Tinplate 40 42 - 6.7 169 168 0.1
Galvanised steel 311 325 - 4.2 1,257 1,195 5.2
Polymer-coated steel 122 97 25.2 475 536 - 11.4
Band 37 30 22.7 137 130 4.9
Formed section 11 21 - 47.1 76 122 - 38.1
Pipe 21 14 46.3 72 83 - 13.2
Metalware 114 109 4.5 438 418 4.8
Other metal products 3 2 21.2 10 38 - 73.3
Share of premium products 38.7% 37.3% 36.4% 43.2%
+ 16.8% Q-o-Q
sales of In Q4 2021, sales of metal products were up 16.8% q-o-q to 3,144 thousand tonnes, due to stronger
finished domestic and external demand. The 16.6% y-o-y increase in sales to 11,977 thousand tonnes was due to the
products completion of Hot-Rolling Mill 2500's upgrade and a favourable environment in global steel markets.
+ 31.4% Q-o-Q
The 31.4% q-o-q rise in long product sales in Q4 2021 to 327 thousand tonnes was due to a recovery in
sales of long demand on Russian market from the construction industry and the metals trading companies. Year-on-year,
products sales decreased by 9.0% in 12M 2021 to 1,161 thousand tonnes amidst scheduled repairs of rolling
equipment.
+ 13.0% Q-o-Q In Q4 2021, sales of hot-rolled products increased by 13.0% q-o-q to 1,577 thousand tonnes, mainly due
to growing demand from the pipe industry. The 37.9% y-o-y increase in sales for 12M 2021 to 6,264
sales of thousand tonnes was driven by the production growth at Hot-Rolling Mill 2500 following its modernisation
hot-rolled in mid-2020.
products
+ 21.4% Q-o-Q
Sales of premium products in Q4 2021 amounted to 1,218 thousand tonnes, up 21.4% q-o-q, amid growing
sales of sales of cold-rolled products and Mill 5000 thick plate. The share of premium products grew to 38.7% of
premium the sales portfolio. Year-on-year, sales decreased by 1.6% in 12M 2021 to 4,359 thousand tonnes, mainly
products due to lower demand for formed sections.
+ 52.6% Q-o-Q Sales of thick plates from Mill 5000 were up 52.6% q-o-q to 250 thousand tonnes, driven by growing
demand from LDP manufacturers and the completion of equipment overhauls. A marginal 1.4% y-o-y decrease
sales of Mill in sales in 12M 2021 to 829 thousand tonnes was due to equipment overhauls during the year.
5000 products
+ 56.4% Q-o-Q
The 56.4% q-o-q increase in sales of cold-rolled products in Q4 2021 to 311 thousand tonnes reflects
sales of higher export sales and a stronger demand from the pipe industry and the metals trading companies. Sales
cold-rolled of cold-rolled products in 12M 2021 remained flat year-on-year and amounted to 896 thousand tonnes.
products
- 6.7% Q-o-Q Sales of tinplate in Q4 2021 decreased by 6.7% q-o-q to 40 thousand tonnes reflecting scheduled
equipment maintenance works amid ongoing highs in equipment utilisation. Sales of tinplate in 12M 2021
sales of remained flat year-on-year and amounted to 169 thousand tonnes.
tinplate
- 4.2% Q-o-Q
sales of The decrease in sales of galvanised steel in Q4 2021 by 4.2% q-o-q to 311 thousand tonnes was due to the
galvanised increase in sales of polymer-coated steel, promising higher margins. For 12M 2021, sales increased by
steel 5.2% y-o-y to 1,257 thousand tonnes, supported by favourable market conditions.
+ 25.2% Q-o-Q Sales of polymer-coated steel increased by 25.2% q-o-q to 122 thousand tonnes, reflecting strong demand
from the construction industry and the metal trading companies. Year-on-year, sales were down 11.4% in
SALES OF 12M 2021 to 475 thousand tonnes, due to the increase in sales of galvanised steel, promising higher
POLYMER-COATED margins
STEEL
STEEL SEGMENT TURKEY
thousand tonnes Q4 2021 Q3 2021 % 12M 2021 12M 2020 %
Crude steel production 255 59 334.2 314 - -
Finished products sales, 379 249 52.2 1,045 741 40.9
including:
Flat hot-rolled products 134 26 408.5 169 19 777.3
Premium products, including: 245 223 10.0 876 722 21.3
Flat cold-rolled products - - - - - -
Downstream products, including: 245 223 10.0 876 722 21.3
Galvanised steel 191 189 1.2 736 540 36.1
Polymer-coated steel 54 34 59.3 139 181 - 23.0
Share of premium products 64.6% 89.4% 83.8% 97.4%
Intersegment sales from Steel segment Russia 28 180 - 84.3 542 255 112.8
+ 52.2% Q-o-Q
SALES OF Sales of metal products in the Turkish steel segment in Q4 2021 were up 52.2% to 379 thousand tonnes,
FINISHED mainly due to growing sales of hot-rolled products amid the midyear launch of the hot-rolling complex.
PRODUCTS Sales of premium products in Q4 2021 increased by 10.0% q-o-q to 245 thousand tonnes, driven by the
release of pent-up demand for polymer-coated steel in the Turkish market.
The 40.9% y-o-y growth in sales in 12M 2021 to 1,045 thousand tonnes reflects a higher demand in global
markets following the relaunch of the hot-rolling complex in mid-2021.
COAL MINING SEGMENT
thousand tonnes Q4 2021 Q3 2021 % 12M 2021 12M 2020 %
Coking coal mining 1,388 1,232 12.6 5,000 4,418 13.2
Coking coal processing 1,593 1,483 7.4 5,929 5,291 12.1
Mined 1,348 1,206 11.8 4,800 4,777 0.5
Purchased 207 212 - 2.1 890 477 86.7
Toll 38 66 - 42.7 239 37 537.2
Coking coal concentrate 888 867 2.5 3,445 3,059 12.6
+ 12.6% Q-o-Q Coking coal production in Q4 2021 amounted to 1,388 thousand tonnes, up 12.6% q-o-q, due to the
completion of face transfer operations at the Chertinskaya-Koksovaya mine. In 12M 2021, coking coal
COKING COAL production increased by 13.2% y-o-y to 5,000 thousand tonnes, driven by MMK's growing demand for
PRODUCTION concentrate and in accordance with mining plan.
+ 2.5% Q-o-Q
Coking coal concentrate production in Q4 2021 increased by 2.5% q-o-q to 888 thousand tonnes. In 12M
COKING COAL 2021, coal concentrate production was up 12.6% y-o-y to 3,445 thousand tonnes amid higher demand from
CONCENTRATE MMK.
PRODUCTION
MMK GROUP'S
SUSTAINABILITY PERFORMANCE (ESG)
-- MMK topped the rating agency Expert RA's ESG transparency ranking of companies and banks.
HIGHLIGHTS
-- MMK ranked third in the Best Disclosure of Information on Sustainability in the Annual
Report category of the Moscow Exchange's Annual Report Contest.
-- MMK climbed into top 4 in WWF Russia's 2021 Environmental Transparency Rating of Mining and
Metals Companies in Russia.
-- Magnitogorsk Iron and Steel Works took first place in the "Eco-Environmental Enterprise"
category of the "Clean Air" National Award because of large-scale modernisation and implementation of
environmental initiatives.
Q4 2021 Q3 2021 % 12M 2021 12M 2020 %
LTIFR1 0.58 0.48 20.8 0.62 0.66 - 6.1
Gross air emissions, thousand tonnes 45.9 47.2 - 2.8 187.1 177.4 5.5
Specific air emissions, kg/tonne 14.1 14.2 - 0.3 14.1 15.3 - 7.8
1 - At the end of 2021, a methodology for calculating injury rates was introduced. The calculation was made for
accidents registered on the territory of MMK Group's industrial site, taking into account third-party organisations.
- 6.1% Y-o-Y In 12M 2021, LTIFR decreased by 6.1% y-o-y to 0.62. The Group continues to implement initiatives to
address the root causes of accidents and improve the production safety culture.
ltifr
- 7.8%
Y-o-Y Specific air emissions for 12M 2021 decreased by 7.8% y-o-y to 14.1 kg per tonne, driven by an increase
in the share of scrap in the charge on the back of increased steel output by the EAF Shop.
SPECIFIC AIR
EMISSIONS Specific air emissions remained flat q-o-q at 14.1 kg per tonne.
-- Higher steel output at the Turkish asset in Q1 2022 will have a positive impact on the
Group's sales volumes, offsetting the effect of overhaul of blast furnace and converter facilities in
Magnitogorsk.
-- Stable demand in Russia combined with a high utilisation of equipment manufacturing premium
OUTLOOK products will positively impact the Group's sales mix.
-- CAPEX for Q1 2022 is expected to decrease significantly q-o-q, in line with the
implementation schedule for projects pursued under the Group's strategy.
-- Operational excellence measures implemented under MMK's updated strategic initiatives will
further boost the Group's profitability in Q1 2022.
ABOUT MMK
MMK is one of the world's largest steel producers and a leading Russian metals company.
The Group's operations in Russia include a large steel-producing unit encompassing the
entire production chain, from the preparation of iron ore to downstream processing of
rolled steel. MMK turns out a broad range of steel products, with a predominant share of Subscribe to our official
premium products. In 2021, MMK produced 13.6 mln tonnes of crude steel and sold 12.5 mln MMK channel on Telegram to
tonnes of commercial steel products. be the first to know about
key MMK news.
??K is an industry leader in terms of production costs and margins. Group revenue in 2020
totalled USD 11,869 mln, with an EBITDA of USD 4,290 mln. MMK boasts the industry's lowest
debt burden. Net debt/EBITDA ratio was -0.09? at the end of 2021. The Group's
investment-grade rating is confirmed by the leading global rating agencies Fitch, Moody's
and S&P.MMK's ordinary shares are traded on the Moscow Exchange, while its depositary
receipts are traded on the London Stock Exchange. Free float amounts to 20.2%.
KEY UPCOMING EVENTS
Veronika Kryachko
+7 915 380 6266 Financial calendar
kryachko.vs@mmk.ru
23-24 March Non-deal roadshow (NDR), online
ESG DEPARTMENT Yaroslava Vrubel +7 982 282 9682 vrubel.ys@mmk.ru COMMUNICATIONS DEPARTMENT Dmitry Kuchumov +7 985 219 2874 kuchumov.do@mmk.ru Oleg Egorov +7 903 971 8837 egorov.oa@mmk.ru
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ISIN: US5591892048 Category Code: TST TIDM: MMK LEI Code: 253400XSJ4C01YMCXG44 Sequence No.: 145544 EQS News ID: 1289313 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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February 28, 2022 01:10 ET (06:10 GMT)
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