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NLMK Group reduced steel production by 1% over the first half of the year

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.


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