NLMK expects US finished steel prices to remain elevated with some softness due to imports and additional capacity coming online in Q4 2021. Some price contraction could surface in the EU next month due to seasonality in manufacturing and balanced steel inventories at consumer sites.
Prices in the domestic Russian market are expected to remain stable following seasonal demand trends and infrastructure investments. NLMK is expected to maintain strong revenue in H2 despite some softening of prices as the hot strip mill at La Louviere ramps up its schedule in Q3 2021.
In H1 2021, NLMK’s revenue climbed by 51pc to $7bn from the same period last year due to higher average selling prices and an increase in the share of finished goods. The company encountered strong sales in the US and the EU due to government stimulus plans and pent-up demand. The Russian steelmaker faced record low inventory due to strong consumption which further supported shoring up prices.
EBITDA more than doubled to $3.2bn in H1 2021 against the year-ago period as the spread between steel products and raw materials broadened. Net profit rose more than five-fold to $2.1bn in H1 2021 in comparison to the same period last year.
In Q2 2021, NLMK’s revenue leaped by over 90pc to $4.1bn against the same year-ago period. EBITDA more than tripled to $2.1bn in the same period. The most recent quarter benefitted from the wider spread between input material costs and finished steel prices.
EBITDA from Russian Flat products in Q2 2021 stood at $1.4bn, from NLMK USA at $213mn, and $157mn from the Russian Long division.
The company invested $44mn in investment projects and achieved gains of $68mn from the efficiency project. The gains were distributed almost evenly at $21-22mn each from Russia Flat, Russia Long, and foreign divisions.
NLMK production data was reported previously by Davis Index.