Steel Mills

Evraz Q3 North American Sales Offset Weakness in Russia

Written by Michael Cowden

Evraz steel sales dropped in the third quarter as a strong showing from its North American operations only partially offset weaker demand as well as logistics and maintenance issues in Russia.

The sales drop in Russia resulted in part from a slowdown in the local construction market.

EvrazIt also stemmed from bad weather and difficulty moving steel – delays in moving slabs to ports, for example, and congestion at ports once the steel arrived there, the company said in a trading update on Thursday, Oct. 28.

The Russian steelmaker – which has operations the western U.S. and western Canada – in addition reported marginally higher crude steel output as increased production in North America helped to offset lower volumes in Russia.

Evraz reports production volumes, sales volumes and average selling prices in trading updates that are typically released to the market ahead of complete earnings figures.

All told, Evraz recorded external steel sales of 2.56 million metric tonnes in the third quarter, down 10.7% from 2.86 million tonnes in the second quarter on slab sales that fell 7.2% to 1.34 million tonnes in the same comparison.

Slab cash costs were $309 per tonne in the third quarter, up 6.6% from $290 per tonne in the second quarter.

Total crude steel production in Russia was 2.91 million metric tonnes in the third quarter, down 1.4% from 2.95 million tonnes in the second. North American crude steel production was 491,00 tonnes, up 18.3% from 415,000 tonnes in the prior quarter.

The company’s North American operations recorded sales of 430,000 tonnes in the third quarter, up 10% from 382,000 tonnes in the second. Sales of flat-rolled products rose 19.7% to 172,000 tonnes quarter over quarter while tubular sales increased 38% to 96,000 tonnes over the same period. The gains were because of “continued increase in market demand,” Evraz said.

Sales of construction products in North America were lower – falling 23.3% quarter over quarter to 63,000 tonnes. The drop was due to repairs following a May explosion at the company’s steel mill in Pueblo, Colo., that stretched into the third quarter.

Evraz makes long products – including wire rod and rail – at the Pueblo mill. It makes plate at a mill in Portland, Ore. And it is an important producer of line pipe and oil country tubular goods (OCTG) in western Canada.

Average selling prices for flat-rolled products were $1,470 per tonne in the third quarter, up 22% from $1,205 per tonne in the second. Selling prices for tubular products were $1,775 per tonne in the third quarter, up 17.3% from $1,513 per tonne in the prior quarter. And average selling prices for construction products were $1,015 per tonne in the third quarter, up 12.8% from $900 per tonne in the second quarter.

By Michael Cowden,

Michael Cowden

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