NLMK Group (the flagship asset is PJSC Novolipetsk Iron and Steel Works) produced 4.4 million tons of steel in the 2nd quarter of 2022, which is 2% lower than in the first quarter, the company said.
The drop in production in April-June compared to the 2nd quarter of 2021 was 4%.
In January-June 2022, the group reduced steel production by 1%, to 8.9 million tons.
Last quarter sales were down 12% QoQ to 4.0 million tonnes, down 7% year-on-year. The decline was due to an increase in slab deliveries within the NLMK Group and a drop in demand in key markets. Finished product sales amounted to 2.2 mt (-13% qoq; -19% yoy). Sales in the “home” markets decreased by 3% qoq to 2.6 mt (-7% yoy) as a result of slower demand in the Russian market.
Sales in export markets decreased in the 2nd quarter by 33% compared to the first quarter, to 1.2 million tons (-17% yoy).
In the first half of the year, sales increased by 4% to 8.6 million tons due to the demand for semi-finished products in export markets in the 1st quarter of 2022. At the same time, sales in the “home” markets decreased by 5% y/y to 5.2 million tons, in export markets – increased by 13%, to 2.9 million tons.
Quarterly deliveries to the US market amounted to 0.4 mt (-3% qoq; -25% yoy) on the back of low buying activity amid high stockpiles. In Europe, sales volumes increased by 20% last quarter to 0.7 mt (+45% yoy) due to increased shipments of hot-rolled steel. In Russia, sales in the second quarter decreased by 10% qoq to 1.5 mt (-15% yoy) as a result of a slowdown in economic activity amid external trade and financial restrictions.
Iron ore production decreased by 7% QoQ to 4.6 mt (-9% YoY). Iron ore sales also fell by 2% to 4.8 mt (-9% y/y).
In Russia, prices for metal products in dollar terms rose by 16% in Q2 Q1 against the back of the ruble strengthening (+23% QoQ). In ruble terms, prices for metal products fell by 10% qoq due to oversupply resulting from sanctions on export restrictions. In addition, a slowdown in overall domestic demand had a negative impact, NLMK said in a statement.