Sales and steel production of the Russian metallurgists declined in the second quarter, which accounted for the majority of quarantine measures in Russia. So, NLMK Vladimir Lisin has reduced steel production by 8% quarter-on-quarter and 3% year — on-year to 3.9 million tons. The results were affected by the shutdown of construction sites in Russia that led to reduced metal demand and the reduction of loading long products segment of the company. After the gradual lifting of quarantine download segment began to grow and by the end of June amounted to 89%. The company showed sales growth of 2% to 4.4 million tons, at the expense of exports, redirecting production from domestic market to Asia. As a result, exports grew by 51% QoQ and 71% yoy to 2 million tonnes. While sales in the domestic market year-on-year fell by 23%, to 2.31 million tons.
during the second quarter, metal prices have remained under pressure in Russia flat products fell by 6-12%, and in Europe — 4-8%, the prices of the slabs, FOB Black sea has decreased by 17%.
Also fell, coking coal and scrap, but iron ore has increased in price by 3% compared to the first quarter because of fears that market supply will decrease with the rapid recovery of the Chinese economy.
the results of Vladimir Rashnikov MMK was influenced not only by the coronavirus, but the reconstruction of mill 2500. Magnitogorsk plant, as in the first quarter, reduced output by 22% QoQ and 24% yoy, to 2.4 million tons. This is worse than management expectations: in late April, the financial Director of MMK Andrei Eremin predicted a drop of 15-17%. Sales of commodity products fell by 19% compared to the first quarter, to 2.2 million tons, and in annual terms — by 22%. MMK noted a positive impact of lifting the quarantine in China on prices.
"Severstal" has reduced steel production by 2% QoQ and 8% yoy, to 2.8 million tons. Consolidated sales fell by 7% and 10%, respectively, to 2.5 million tons. The company managed to keep the share of exports to 44% while reducing the consumption in Russia. In the export structure increased the share of sales with long-term implementation. However, the company observes and growth stocks. According to the company, average selling prices of steel products fell slightly in the first half of this year, by 4%, despite a significant decline in prices on world markets. The company notes that the pipe business continues to operate in low sales. The company in the second quarter sold 25 thousand tons of pipes, and intends to redirect some volumes to export.
Irina Elizarovskaya of Raiffeisenbank calls the results expected as the company originally planned for the second quarter of different repairs, given the poor market conditions.
the Expert notes that the company has seen a recovery in domestic demand since the end of the second quarter, so the share of sales on the domestic market in the third quarter is expected to grow.
the Main question — will it be possible to increase sales in the second half. "Still, demand in Europe fell. The company, though, and redirect volumes to other markets — in particular, the middle East, Africa, South-East Asia — for a year I expect a decline in sales. Perhaps this reduction will be small, especially if you start to implement the economic recovery plan, which laid down the infrastructure projects — the TRANS-Siberian railway, BAM, the highway", — says Irina Elizarovskaya.
