Moscow, Russia – 19 March 2020 – Mechel PAO (MOEX: MTLR, NYSE: MTL), one
of the leading Russian mining and metals companies, announces 2019
operational results.
Production and sales (Unit in thousand tonnes)
Product Name
|
2019
|
2018
|
%
|
4Q2019
|
3Q2019
|
%
|
Run-of-mine coal
|
18,845 |
18,813 |
0 |
5,420
|
5,290 |
+2 |
Sales (Unit in thousand tonnes)
Product Name
|
2019
|
2018
|
%
|
4Q2019
|
3Q2019
|
%
|
Coking coal concentrate
|
7,163 |
7,149 |
0,2 |
1,830 |
1,720 |
+6 |
Including coking coal concentrate supplied to third parties
|
4,303 |
4,258 |
+1 |
994 |
1,068 |
-7 |
PCI
|
1,417 |
1,237 |
+15 |
482 |
390 |
+24 |
Including PCI supplied to third parties
|
1,417 |
1,237 |
+15 |
482 |
390 |
+24 |
Anthracites
|
736 |
1,169 |
-37 |
235 |
206 |
+14 |
Including anthracites supplied to third parties
|
548 |
968 |
-43 |
177 |
137 |
+29 |
Thermal coal
|
5,181 |
5,290 |
-2 |
1,174 |
1,364 |
-14 |
Including thermal coal supplied to third parties
|
4,491 |
4,538 |
-1 |
950 |
1,203 |
-21 |
Iron ore concentrate
|
2,558 |
1,972 |
+30 |
636 |
722 |
-12 |
Including iron ore concentrate supplied to third parties
|
193 |
140 |
+38 |
12 |
14 |
-15 |
Coke
|
2,528 |
2,440 |
+4 |
615 |
649 |
-5 |
Including coke supplied to third parties
|
945 |
697 |
+36 |
248 |
281 |
-12 |
Mechel PAO’s Chief Executive Officer Oleg Korzhov commented on
operational results:
“For us, 2019 became a year of major equipment reconstruction projects
in our steel segment and restoring the equipment pool in our mining
division. We have seen results of this effort at Southern Kuzbass Coal
Company as early as the end of last year — starting in October, the
company reached a monthly output level of 1 million tonnes and
demonstrated a confident growth of all key results, with mining volumes
up by 25%. Korshunov Mining Plant improved its annual output by 30%. In
the steel segment, we completed a large-scale reconstruction of one of
our three blast furnaces and one of three converters. This will increase
these facilities’ output by 15% and thus our overall steel output in
2020. Reconstruction of one of Bratsk Ferroalloys Plant’s ferroalloy
furnaces is also nearly complete.
“In 2019 we have invested a lot of effort in maintaining coal mining at
the previous levels as our stripping volumes increased dramatically. We
did this both by launching new mining equipment and by bringing in
third-party contractors. It is important to note that at Southern
Kuzbass Coal Company we managed to implement the strategy of increasing
mining of valuable coking coal grades as new longwalls at V.I. Lenina
Underground and Sibirginskaya Underground mines were launched.
“As for the coal market situation, this accounting period was very
volatile as prices for premium hard coking coal were very good in the
first half a year, staying near the level of $200 per tonne, but
starting mid-year, the prices began to decline and reached less than
$130. In August-October we have traditionally signed a series of major
contracts, with customers both old and new, and ensured ourselves
guaranteed sales for the year ahead. Demand for coal from our customers
in Asia Pacific remains strong as we have foreseen. China and South
Korea were among that market’s key players who increased import of both
coking and thermal coal. As for Mechel’s sales, in 2019 we have
decreased sales to China by a quarter, redistributing them in favor of
Japan’s market which is more profitable for us. In 2020, the coal market
is still volatile, and considering the coronavirus situation, may remain
so for several months yet.
“Coking coal concentrate sales in 2019 remained largely at the previous
year’s level. 29% of our overall coking coal concentrate sales went to
Japan, 27% to China and 24% to our Russian customers.
“PCI sales went up by 15% primarily due to increased export to South
Korea.
“Thermal coal sales remained roughly at 2018 levels. We redistributed
sales in favor of more profitable Asian markets, increasing exports to
this region by half, with sales to our Vietnamese customers nearly
quadrupling.
“The output increase at Korshunov Mining Plant, achieved thanks to our
technical upgrade program, had a positive impact on iron ore concentrate
sales — sales to third-party clients went up by 38% year-on-year.
“Coke sales to third parties went up by 36% as stockpiles freed due to
repairs at Chelyabinsk Metallurgical Plant’s blast furnace #4 were sold
to export, including Turkey and India.
“Due to a large-scale upgrade of Chelyabinsk Metallurgical Plant’s
blast-furnace and oxygen-converter workshops, pig iron and steel output
in this accounting period went down by 8% and 7% accordingly. With this
in mind, we have optimized our operations so as to partially compensate
for the output decrease by improving its profitability. Long rolls sales
went down by 8%, but sales of shapes and sections produced by the
plant’s universal rolling mill went up by 2%, and rails by 15%. Rail
sales, both domestic and international, nearly doubled — not counting
shipments made to Russian Railways.
“Flat rolls sales went down by 7%. At the same time, we have upped sales
of stainless flats 2.5 times, with a significant raise of the average
price. In this product segment, we are consistently increasing our share
of the Russian market as per our strategy.
“The 10-percent decrease in sales of Bratsk Ferroalloys Plant’s products
was due to the ore-thermal furnace #3 being halted for an upgrade. Its
relaunch is scheduled for late March. Bratsk Ferroalloys Plant’s upgrade
was synchronized with similar works undertaken at Chelyabinsk
Metallurgical Plant, as the latter needed less ferroalloy products
during major repairs of its own steelmaking facilities. Third-party
sales remained at the same level as high-quality ferrosilicon was
redirected from the domestic market to Asia.
“Hardware sales went down by 9%, this time due to decreased output of
various types of wire at Beloretsk Metallurgical Plant and Mechel
Nemunas as this segment faced an unfavorable market situation, as well
as introduction of import quotas and fees for shipments to the European
Union and Ukraine.
“Sales of forgings went down by 9% year-on-year as demand hit a major
seasonal slump in late 2019. Stampings sales went down by 25% as sales
of the most mass product, rough-forged axles for railway transport,
declined. In this segment, we staked on the increase in sales of
high-priced products — stampings made of alloyed, stainless and
heat-resistant steels. Aviation companies are key consumers of this type
of product.
“Our power division’s facilities in 2019 produced more electricity by 4%
in accordance with operational plans regarding the load on Southern
Kuzbass Power Plant. The decrease in heat output by 6% was due to
prevalent warmer temperatures.”
Link:
Official Document |