Severstal's Q4 steel output, sales fall on quarter on furnace works

New York — Russian mining and steel company Severstal said Friday its steel output and sales both fell in the fourth quarter, compared with Q3, due to short-term maintenance on steelmaking furnaces at its Cherepovets Iron and Steel Works, although annual sales remained unchanged.

In Q4, Severstal made 2.7 million mt of crude steel, down 10% quarter on quarter, converting this into 2.65 million mt of saleable products, a 6% drop in volumes. Exports comprised 41% of this total, up from 33% in Q3 2019. The company had to divert tonnage away from the domestic market where demand was softening during a seasonal slowdown.

The share of high value-added (HVA) products remained unchanged on the quarter at 45%, supported by higher heavy plate and cold rolled coil sales as volumes of longs and hot rolled coils declined.

Severstal's washed coking coal sales, excluding intra-group supplies, totaled 77,000 mt. The amount of iron ore pellets sold to third parties grew 32% to 1.8 million mt reflecting higher product output. In October-December, Severstal shipped to customers 350,000 mt of iron ore concentrate.

In the full year 2019, the company's crude steel output slipped 2% on 2018 to 11.85 million mt, as higher facilities' productivity was offset by lower electric arc furnace output in the second half of 2019 following the sale of the 1 million mt/year EAF-based Balakovo mini-mill.

However, the company kept its steel product shipments flat for the year at 11.15 million mt.

The share of HVA products remained stable in 2019 at 45%, reflecting high sales of heavy plate and galvanized and colour-coated coils following the ramp-up to capacity of new production lines.

In 2019, the company distributed 65% of its steel products in Russia, up from 61% in 2018, as domestic prices were more attractive than export ones.

Last year, Severstal shipped to customers 408,000 mt of washed coking coal, up 14% year on year, as a result of planned production growth. Its iron ore concentrate sales, excluding intra-group supplies, increased 17% year on year to 965,000 mt, reflecting production growth at its miner and pellet producer Karelsky Okatysh in Karelia and at its iron ore miner Yakovlevsky Rudnik in the Belgorod region, western Russia.

Emissions cut

In 2019 the emission of pollutants at Severstal's steelmaking enterprises fell 8% to 277,492 mt. The specific atmospheric emissions dropped 7% to 23.4 kg/mt of steel, down from 25.1 kg in 2018, as a result of reduced use of coke breeze in sintering. The reduction in gross emissions is also owed to the sale in mid-2019 of the Balakovo plant, whose only first half of the year's emissions were included in the total.

Severstal Resources, the company's raw material mining sites, reduced its pollutant emissions by 3% to 213,291 mt due to higher utilization of methane in coking coal mines.