MECHEL PAO Moscow, Russia - August 29, 2023 - Mechel PAO (MOEX: MTLR), one of the leading Russian mining and metals companies, reports 2Q2023 and 1H2023 operational results.
Mechel PAO's Chief Executive Officer Oleg Korzhov commented on the results:
"In Q2, the company increased coal output by 15% and thanks to the partial lifting of Russian Railways' restrictions on East-bound shipments, we were able to improve our sales figures. However, logistical barriers that put pressure on the company over the last two quarters, affected our coal production plans which we were forced to reduce, and so had a negative impact on actual sales results.
"The company is taking measures to gradually restore coal output and processing volumes, including acquisition and launching new mining machinery and equipment, and developing new projects to improve operational efficiency. In six months, Mechel Mining acquired 26 BelAZ dump trucks, seven excavators, seven drilling rigs, two tunnel borers, as well as other equipment and machinery. In the first quarter, we launched a new section of longwall face 3-1-11 at Sibirginskaya Undeground mine and a new longwall face at V.I. Lenina Underground mine at Southern Kuzbass Coal Company. Yakutia Ore Company started shipping out its products. The overhaul of Chelyabinsk Metallurgical Plant's blast furnace No. 5 is nearing completion, and Beloretsk Metallurgical Plant resumed production of high-quality galvanized wire after the overhaul of its thermal galvanizing unit.
"Our sales divisions continue to closely monitor market conditions and look for the most profitable options for product sales.
"The overall 26% quarter-on-quarter increase in coking coal sales was due to increased output at Southern Kuzbass Coal Company's mines. Almost the entire volume of supplies to third parties was exported to Asia, including under long-term contracts.
"A 9% decrease in PCI sales quarter-on-quarter was due to the fact that stockpiles accumulated in Far Eastern ports were sold in the first quarter. The dynamics of PCI sales in 1H2023 was due to increased production of this type of coal.
"As for anthracites, in 1Q2023 our ability to export this product by rail from Kuzbass was severely limited, and so shipment of several batches of anthracites was put off to 2Q2023, which led to sales growing by 38% in the reporting period. Sales in 1H2023 went down 23% as we were unable to fully make up for anthracite shipments previously made to European steel mills.
"Increased production at Korshunov Mining Plant quarter-on-quarter resulted in positive dynamics of iron ore concentrate sales to the Group's facilities and magnetite sales to third-party customers. The 1H2023 sales went down year-on-year due to complicated conditions of iron ore mining at Korshunov Open Pit because of water encroachment on the lower levels.
"Coke sales remained at the previous quarter's level, while third party sales went up 11% due to export shipments.
"Pig iron and steel output went down quarter-on-quarter by 7% and 3% respectively due to the overhaul of Chelyabinsk Metallurgical Plant's blast furnace No. 5, which started in this reporting period. Rolled longs sales went up by 5% due to increased domestic sales of products from Chelyabinsk Metallurgical Plant's universal rail mill and stable demand for rebar in the construction sector. The overall 15% decrease in sales of rolled flats was due to scheduled repairs of facilities and equipment. At the same time, in Q2 we significantly increased production of high-margin longs and flats at the Group's key steel facilities.
"Beloretsk Metallurgical Plant generally maintained production and sales volumes at the level of the previous quarter. The plant continues to implement the investment project on modernization of steel wire and wire rod production and expands its hardware range of steel wire, strip and ropes, including polymer-coated ones.
"Even as our export opportunities narrowed, forgings shipments went up 3% as we attracted new customers on the domestic market. Forgings sales went down 8% quarter-on-quarter, while the share of high-margin products in the sales mix increased.
"The 14% increase in ferrosilicon sales in Q2 was due to our signing new contracts and expanding out supply geography.
"The 12% decrease in electricity generation quarter-on-quarter was due to the start of the repair campaign and the end of the heating season. The major decrease in heat generation is seasonal in nature.
Production (thousand tonnes):
Product Name | 2Q2023 | 1Q2023 | % | 1H2023 | 1H2022 | % |
Run-of-mine coal | 2,429 | 2,105 | +15 | 4,534 | 5,983 | -24 |
Pig iron | 781 | 835 | -7 | 1,616 | 1,668 | -3 |
Steel | 881 | 906 | -3 | 1,787 | 1,853 | -4 |
Electric power generation (thousand kWh) | 589,232 | 667,646 | -12 | 1,256,879 | 1,186,468 | +6 |
Heat power generation (Gcal) | 887,421 | 1,935,886 | -54 | 2,823,307 | 2,878,673 | -2 |
Sales (thousand tonnes):
Product Name | 2Q2023 | 1Q2023 | % | 1H2023 | 1H2022 | % |
Coking coal concentrate | 699 | 553 | +26 | 1,251 | 2,081 | -40 |
Including coking coal concentrate supplied to third parties | 306 | 323 | -5 | 629 | 1,231 | -49 |
PCI | 387 | 423 | -9 | 809 | 456 | +78 |
Including PCI supplied to third parties | 387 | 423 | -9 | 809 | 456 | +78 |
Anthracites | 300 | 218 | +38 | 518 | 676 | -23 |
Including anthracites supplied to third parties | 262 | 195 | +34 | 457 | 543 | -16 |
Thermal coals | 544 | 700 | -22 | 1,244 | 1,579 | -21 |
Including thermal coals supplied to third parties | 345 | 551 | -37 | 895 | 1,184 | -24 |
Iron ore concentrate | 349 | 305 | +15 | 654 | 876 | -25 |
Including iron ore concentrate supplied to third parties | 8 | 5 | +40 | 13 | 13 | -2 |
Coke | 555 | 560 | -1 | 1,115 | 1,153 | -3 |
Including coke supplied to third parties | 196 | 177 | +11 | 373 | 387 | -4 |
Ferrosilicon | 21 | 18 | +14 | 39 | 43 | -9 |
Including ferrosilicon supplied to third parties | 15 | 13 | +17 | 28 | 32 | -11 |
Long rolls | 626 | 595 | +5 | 1,221 | 1,319 | -7 |
Flat rolls | 94 | 111 | -15 | 205 | 204 | +1 |
Hardware | 117 | 119 | -2 | 236 | 257 | -8 |
Forgings | 10 | 9 | +3 | 19 | 21 | -8 |
Stampings | 15 | 16 | -8 | 30 | 35 | -14 |
***
Ekaterina Videman
Tel: + 7 495 221 88 88
ekaterina.videman@mechel.com
***
Mechel is an international mining and steel company. Mechel unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, heat and electric power. All of its enterprises work in a single production chain, from raw materials to high value-added products.
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Mechel PAO published this content on 29 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 August 2023 11:07:49 UTC.
