Severstal increased steel production by 5% and cast iron by 3% in nine months

Mining and metallurgical company Severstal (MOEX: CHMF) presented operating results for nine months of 2023. According to the report, in January-September, due to an increase in the utilization of units, steel production increased by 5%, to 8.35 million tons, and cast iron – by 3%, to 8.35 million tons. Sales remained unchanged compared to the same period in 2022 and remained at 8.16 million tons.

Based on the results of nine months of this year, there was a redistribution in the product sales structure of Severstal. Thus, sales of semi-finished products decreased by 37%, to 0.81 million tons, while sales of commercial steel (hot rolled and long products) increased by 6%, to 3.43 million tons. Sales of high value added products (HVA) increased by 9% to 3.92 million tons. The share of VDS products in total sales increased by 4 percentage points and amounted to 48%.

Despite the increase in steel production in January-September, in the third quarter the figure decreased by 9% compared to the previous quarter, to 2.7 million tons, due to planned repairs. Consolidated sales of Severstal metal products remained at the level of the second quarter, amounting to 2.69 million tons.

A decrease in July-September results was also recorded in sales of semi-finished products. In the third quarter, they decreased by 18% and amounted to 0.23 million tons. Commercial steel sales fell 5% in the second quarter to 1.05 million tonnes, driven by lower hot-rolled sales and the shutdown of Mill 2000 for major repairs.

Sales of VDS products increased by 8%, to 1.42 million tons, mainly due to growing demand for galvanized steel, as well as increased demand for pipes, including oil and gas products. The share of such products in total sales increased by 4 percentage points, to 53%.

“Demand on the Russian market is showing signs of recovery after the crisis year of 2022. Overall, in 2023 we expect demand to grow by 6% YoY, to 45.8 million tons. The main drivers may be demand from the construction industry and mechanical engineering,” commented Alexander Shevelev, CEO of Severstal Management JSC, on the results.

On October 18, Severstal announced plans to invest 97 billion rubles. in the construction of a complex for the production of iron ore pellets on the territory of the Cherepovets Metallurgical Plant. The complex’s capacity will be 10 million tons, construction will begin in January 2024. The start of production is planned for 2026.

Read more in the Kommersant article. “Severstal is betting on pellets”.

Milena Kostereva