NLMK boosts steel output 25% in 2012
MOSCOW. Jan 30 (Interfax) - Novolipetsk Steel (NLMK) boosted crude steel output 25% in 2012 to 14.9 million tonnes, the company said in a statement.
Output fell 2.6% in Q4 compared with Q3 2012 to 3.7 million tonnes.
With its 2012 output, NLMK overtook the major Russian steel producers Evraz and Severstal . NLMK's Russian subdivision produced 13.988 million tonnes of steel last year, where Evraz produced 11.675 million tonnes in Russia and Severstal 10.553 million tonnes.
NLMK produced 11.231 million tonnes in 2011, Evraz 12.125 million tonnes, and Severstal 11.354 million tonnes.
The view at NLMK is that last year's record figures were the logical outcome of company strategy to increase production in Russia and its presence on the domestic market. "We moved into first place in Russia thanks to the continual expansion of capacity over the previous five years, organic growth in Lipetsk, and also the acquisition of shaping capacity," the group's President Oleg Bagrin told Interfax. That, he said, led to an increase in the company's ability to make products with a high level of processing in Russia and made it possible to realize plans for international expansion onto niche markets for sheet and automotive roll.
"In the future, we intend to develop the leadership achieved by increasing the effectiveness of production, sales, and service worldwide," Bagrin said.
NLMK operating results ('000 tonnes):
| Q4 2012 | Q4 2012/Q3 2012 | Q4 2012/Q4 2011 | 2012 | 2012/2011 | |
| Pig iron | 46 | -77,6% | -89,7% | 615 | -36,1% |
| Salable slabs | 1 252 | 28,1% | 79,4% | 3 979 | 27,1% |
| Flat steel | 1 998 | -8,7% | -3,9% | 8 904 | 24,8% |
| Long steel | 333 | -9% | 18,6% | 1 420 | 10,4% |
| Metalware | 67 | -14,6% | 45,7% | 285 | 19% |
| Total steel products | 3 696 | -3,1% | 4,1% | 15 203 | 18,4% |
In 2012 NLMK posted record sales of 15,203 million tonnes, +18.4% y-o-y. Finished steel sales rates significantly surpassed those of semis: finished steel sales grew by 25% y-o-y to 8.9 million tonnes, while value added grades soared by 27% y-o-y to 5.1 million tonnes. This growth was driven by the consolidation of our international rolling assets in mid-2011 and in the increase in rolled steel sales at the Novolipetsk.
Sales of semis (pig iron and slabs) grew by 12% y-o-y to 4.6 million tonnes. Slab sales to third parties (including sales in Russia) grew by 850,000 tonnes sequentially to 3,979 million tonnes.
Key export markets remained largely unchanged and included Europe, United States, Middle East, Southeast Asia, Central and Latin America.
Crude steel production totaled 3.674 million tonnes (-2.6% q-o-q). Steelmaking facilities of the Group operated at 93% (-3 p.p.) capacity, including over 97% at Novolipetsk, 81% (-5 p.p.) at the Long Products Division and approximately 67% at our international divisions (-10 p.p.).
Finished steel output totaled 2.5 million tonnes (-4.5% q-o-q).
Sales totaled 3.7 million tonnes (-3.1% q-o-q), including 1.25 million tonnes of slabs (+28% q-o-q) and 2.4 million tonnes of finished steel (-8.9% q-o-q). About 0.6 million tonnes of slabs were directed to NLMK's international rolling assets (0.5 million tonnes in Q3).
Total sales to the domestic market increased by 4.5% to 1.3 million tonnes. Long product sales were down by 9% due to the seasonal slowdown in the Russian construction sector. The share of export sales stood at 64% on the back of the overall decline in demand in international markets.
NLMK Group's international rolling assets accounted for 22% (-2 p.p.) of total steel product sales: 11% (-2 p.p.) for NLMK Europe and 11% (flat q-o-q) for NLMK USA.
At the end of Q4 prices displayed positive trends in some regions worldwide driven by better demand supported by restocking.
"Q4 revenue is expected to decline by c.8% q-o-q resulting from weaker market conditions and seasonal decline in sales at year end. We believe Q1 2013 steel output will remain sequentially flat. The beginning of 2013 brought a mild improvement in pricing due to finished product restocking and a corresponding revival in demand, as well as growth in raw material prices," NLMK said.