Metalloinvest (the "Company"), a leading manufacturer and supplier of iron ore products and hot briquetted iron (HBI) in the global market, one of the regional producers of high-quality steel, announces operating results for 9 months of 2021.

Management comments

Nazim Efendiev, CEO of Metalloinvest Management Company, commented:

“For 9 months of 2021, the Company's production indicators remain at a high level. During the reporting period, we increased supplies to our key sales markets - Russia and Europe. The significant growth in demand from our European partners focused on the high quality of both iron ore and metallurgical products is a reflection of the global agenda for the decarbonization of the industry. In October, an agreement was signed on the construction of HBI-4 at Lebedinsky GOK with a capacity of 2.08 million tons - this project will consolidate the Company's leadership in the marketable HBI market and strengthen our position as a leading supplier of a key product for the transition to green metallurgy. " >

Iron ore products

Production

• Iron ore production in 9M 2021 increased by 1.1 % YoY and amounted to 30.7 million tons. Compared to 3Q 2020, production increased by 1.0% to 10.3 million tonnes. These dynamics are mainly due to an increase in the average productivity of equipment
• Pellet output increased by 3.0% YoY and amounted to 21.4 million tonnes. Quarterly production increased by 9.6% to 7.2 million tonnes. The increase is due to a decrease in repair time, mainly due to the overhaul of OM-3 at MGOK in 3Q 2020
• In 9M 2021, the Company produced 5.7 million tonnes of HBI /DRI, which is 1.3% lower Indicator 9M 2020. In 3Q 2021, production amounted to 1.8 million tons, which is 9.1% more than in 2020. The growth is associated with a decrease in repair time and an increase in the productivity of UM-1 after modernization in 2020

Implementation

• Following the results of 9M 2021 the volume of supplies of iron ore products to external consumers amounted to 20.4 million tons, 2.5% less than in 2020
• Products with high added value (pellets and HBI /DRI) prevail in the total supply of iron ore products and is 72% in 9M 2021
• The share of sales of iron ore products to the domestic market in 9M 2021 increased by 2 p.p. and accounted for 50% of the total volume
• Due to the recovery in demand in the traditional nearby sales markets, in 9M 2021, supplies to Europe increased by 47% YoY and amounted to 36% of the total volume. Thus, the volume of exports to China has significantly decreased (-73% YoY) compared to 9M 2020

Metallurgical products

Production

• In 9M 2021 Metalloinvest produced 1.8 million tonnes of pig iron, which is in line with the 2020 indicator. At the same time, production volume in 3Q 2021 increased by 15.4% and amounted to 0.6 million tonnes compared to 3Q 2020. The increase in production volume was due to the commissioning of DP-3 after modernization
• 9M 2021 decreased by 2.5% YoY and amounted to 3.6 million tonnes. The decrease is due to the repair of chipboard-4 in 3Q 2021 at OEMK

Sales

• Sales of cast iron in 9M 2021 to external consumers increased by 7.6% YoY to 1.0 million tonnes. At the same time, in 3Q 2021 supplies increased by 26.4% compared to 3Q 2020 and amounted to 0.3 million tonnes
• The share of HVA steel products sales in 9M 2021 increased to 42% (35% in 9M 2020), mainly due to growth in SBQ sales (+ 25.9% YoY)

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