Q2 2020 highlights
NLMK Group steel output* and sales were impacted by declining demand in
its traditional sales markets due to the COVID-19 pandemic.
Steel output declined by 8% qoq (-3% yoy) to 3.9 m t, due to lower
utilization rates at NLMK Russia Long Products and NLMK USA. Towards the
end of the quarter capacity utilization in the long products segment
began to recover, reaching 89% in June. Capacity utilization rates at
NLMK’s European companies and NLMK USA remain low (66% and 50% in June,
respectively).
Sales grew by 2% yoy to 4.4 m t due to higher slab and pig iron exports;
Q2 2019 saw overhauls at NLMK Lipetsk BF and BOF operations. Quarter on
quarter, sales declined by 3%.
Sales in export markets grew to 2 m t (+51% qoq; +71% yoy), due to
deliveries being redistributed to the Asian market amid lower demand in
other sales markets in April and May. Exports of semi-finished products
and finished rolled products increased by 76% and 22% qoq, respectively
(+137% yoy and +17% yoy).
NLMK Group sales to ‘home’ markets declined by 24% qoq (-23% yoy) to
2.31 m t.
6M 2020 highlights
Steel output went down by 1% yoy to 8.1 m t.
Sales totalled 8.9 m t (flat yoy).
Group export sales increased by 6% yoy to 3.4 m t, supported by higher
exports of semis.
Sales to ‘home’ markets dropped by 6% yoy to 5.3 m t, due mainly to
lower demand in the US market.
NLMK Group's Q2 2020 operating performance
Steel output declined by 8% qoq (-3% yoy) to 3.9 m t, due to lower steel
output at the NLMK Russia Long Products and NLMK USA segments amid lower
demand caused by the COVID-19 pandemic. Steel capacity utilization rates
at NLMK Lipetsk (the Lipetsk site) were 100%.
Sales increased by 2% yoy to 4.4 m t, driven by higher steel output at
the Lipetsk site; Q2 2019 saw overhauls at NLMK Lipetsk BF and BOF
operations. The 3% qoq reduction was due to lower sales at NLMK USA and
NLMK DanSteel (-39% and -26% qoq, respectively). NLMK sales to third
parties were up by +13% qoq thanks to sales market and product portfolio
diversification.
Sales mix: consolidated sales of semi-finished products increased by 10%
qoq to 1.9 m t (+27% yoy), driven by higher exports of pig iron and
billets. Slab sales climbed 1% qoq to 1.4 m t (+12% yoy). The share of
exports to independent buyers in the sales mix increased, whereas the
share of slab sales to NBH and sales to the Russian market decreased.
Sales of semi-finished products to third parties increased by 43% qoq
(+79% yoy) to 1.5 m t. Slab deliveries to NBH went down by 36% qoq to
0.47 m t (-33% yoy) against the backdrop of the segment’s lower demand
(Appendix 2). Sales of finished products decreased by 12% qoq to 2.4 m t
(-14% yoy) amid lower demand and an increase in the share of
semi-finished products in the portfolio.
Sales to export markets grew by 51% qoq (+71% yoy) to 2 m t with an
increased share ofsemisin the exportsales mix.
Sales to ‘home’ markets declined by 24% qoq (-23% yoy) to 2.3 m t as
steel consumption in the Russian, US and EU markets declined. Sales in
Russia declined by 18% qoq (-15% yoy) to 1.4 m t. In the US and the EU,
sales declined by 39% and 26% qoq (-43% yoy and 24% yoy), respectively
(Appendix 14).
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