Severstal expects the Russia’s construction sector to remain a key steel demand driver in 2020, supported by National projects investments.
The company attributed the current limited regional supply to the ongoing capital investments in different mills, which, along with an appreciating ruble, is likely to improve pricing in the main Russian market in 2020. Severstal forecasts sales volumes to stay flat in 2020 and decrease 1pc in 2021.
Crude steel production in 2019 declined 2pc to 11.85mn mt from 12.04mn mt in 2018 as higher aggregate productivity levels were offset by lower EAF production in the second half following the sale of its Balakovo mini-mill.
Coking coal concentrate sales volumes from Vorkutaugol surged 38pc from 2018, as a result of planned production growth, the company indicated. Iron ore concentrate sales volumes increased 14pc to 6.26mn mt in 2019 compared to 5.51mn mt the previous year due to increased production volumes at the Karelsky Okatysh and the Yakovlevskiy mine.
In 2019, the Resources division sales volumes increased 38pc for coking coal and 14pc for iron ore concentrate year-on-year.
Group revenue declined mainly due to the weaker pricing environment for steel and raw materials, with the company reporting a 4.9pc revenue decrease to $8.157bn in 2019, while its EBITDA decreased by 10.7pc to $2.805bn in the same time period against the previous year.
Average steel sales prices declined 1-14pc depending on segment year-on-year in line with global benchmarks. At $4.908bn cost of sales increased from 58.3pc in 2018 to 61.3pc in 2019. Profit for the period declined 13.8pc to $1.767bn.
A large part of the company’s revenue came from hot-rolled strip and plate, which comprised 34.1pc of total revenues followed by pellet and iron ore at 8pc, galvanized and metallic coated sheet at 8.4pc, and cold-rolled sheet at 7.4pc.
Long products comprised 7pc of the total revenue followed by, metalware at 6.7pc, formed tubes at 5.4pc, color coated sheet at 4.9pc, large diameter pipe at 4.6pc, semi-finished at 2.4pc, coal and coking coal at 1.2pc, and other including a negligible amount of scrap making up for 36pc of the total revenue.