Russian steel giant Evraz reported a six per cent decline in consolidated crude steel production in the second quarter compared to the first, mainly due to scheduled capital repairs, maintenance work and modernisation at Russian steel mills.
The steel product volumes also declined by 6% (8% compared to Q2 2011), partly driven by the scheduled modernisation of production facilities in Russia and partly driven by weaker demand in some markets, namely Europe and South Africa. The share of finished products in the total steel products output remained unchanged at 80% in the first half of 2012 and 79% in the second quarter.
Looking at steel production regionally, in Russia volumes decrease by 11% quarter-on-quarter (q/q) and 7% year-on-year (y/y), following repairs and a temporary shut-down.
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In the Ukraine, production leapt 29% q/q and 23% y/y as a result of the improving efficiency of the blast furnaces operation at Petrovskogo as well as the completion of planned maintenance at one of the two blast furnaces in the first quarter.
In North America the steel mills have continued to operate at high utilisation levels boosting rail production by 12% q/q, while production of tubular goods increased 7% q/q.
In Europe, steel production grew by 12% q/q, although construction products output fell to zero following the shutdown in February of a loss-making heavy section mill. Production of flat-rolled products went down by 10% q/q and by 20% y/y in response to worsening plate demand in European markets.
Lastly, in South Africa production decreased 13% q/q and 16% y/y due to weak South African market and unstable operations at iron and steel plants.
Iron ore production by the company was flat both q/q and y/y, while coking coal production at Yuzhkuzbassugol decreased by 7% compared q/q due to a longwall repositioning at the Uskovskaya mine in May 2012. It increased by 10% y/y when the production had been negatively affected by shutdowns of the mines to resolve operational issues associated with safety risks.
Evraz's total production of primary vanadium decreased by 11% q/q due to lower iron production both in Russia and South Africa. The 18% decrease in production of ferrovanadium compared to the first quarter of 2012 and by 10% compared to the second quarter of 2011 was driven by weaker market demand. Nitrovan production rose by 85% q/q after completion of the planned maintenance at Vametco, South Africa, in the first quarter 2012.
The share price fell 0.98% to 252.20p by 14:34.
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