EVRAZ sees production and prices fall in the third quarter

EVRAZ, the steel, mining and vanadium group, saw production decrease in the third quarter while prices were hit by tough conditions in global steel markets.

Consolidated crude steel production in the three months to the end of September fell by 3% compared with the preceding second quarter and the same quarter of last year due to lower production at its Vitkovice Steel operations in the Czech Republic and Highveld in South Africa.

Output of crude steel at Vitkovice fell by 55% year-on-year and 59% quarter-on-quarter.

This month (start of the fourth quarter), the company had to temporarily shut down steel production at this particular site as a result of low demand and to optimise the raw materials inventory.

Meanwhile, production at Highveld also fell sharply in the third quarter as a result of a four-week industrial action.

Despite the reduced output, total production volumes of steel products increased by 2% mainly due to a higher use of purchase third parties slabs.

The firm said that prices for most steel product groups fell during the period on the back of ongoing uncertainty in global steel markets and falling prices of iron ore and coking coal. In EVRAZ's semi-finished and construction products, the firm's two largest product groups, average selling prices were down 13% and flat, respectively.

"In Q42012 we expect to be subject to usual seasonal trends, including slowdown in the construction activity in Russia."