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NLMK Group releases Q1 2021 trading update

2021-04-13

Apr. 13, 2021 - NLMK Group increased steel output by 12% qoq (+4% yoy) to 4.4 m t. Consolidated sales declined by 7% qoq to 3.9 m t (-13% yoy) driven by a decrease in commercial pig iron sales amid repairs at NLMK Lipetsk BF operations coupled with an increase in intragroup slab sales. 


Q1 2021 highlights: 

 Steel output grew to 4.4 m t (+12% qoq; +4% yoy) with a post-overhaul increase in NLMK equipment productivity, as well as with the completion of planned maintenance at the Russia Long Products segment. 

 External sales decreased by 7% qoq (-13% yoy) to 3.9 m t with the decrease in commercial pig iron sales against the backdrop of completed overhauls at one of NLMK Lipetsk blast furnaces, and due to recovering intragroup slab deliveries to NLMK USA to meet local demand for finished rolled products (in stocks at the end of Q1). Additionally, stocks have piled up at the end of the quarter at the Black Sea ports due to unfavourable weather conditions; corresponding steel volumes will be sold in Q2 2021. 

 Sales on ‘home’ markets increased by 4% qoq (-10% yoy) to 2.7 m t. 

 Sales on export markets decreased to 1.2 m t (-21% qoq; -12% yoy) with a decline in pig iron sales and an increase in intragroup slab deliveries. 


* Hereinafter, Q1 2021 output and sales figures are preliminary and can be updated. Hereinafter, NLMK Group steel output and sales on 'home’ markets are shown taking into account NBH performance. Product sales are shown without taking into account NBH performance. Sales to NLMK Group’s 'home’ markets are understood to be sales by NLMK Group companies in the regions where the products are produced in Russia, the EU, and the US.


NLMK Group's Q1 2021 operating performance 

Steel output increased by 12% qoq to 4.4 m t (+4% yoy) with equipment ramp-up to full capacity following the completion of overhauls at the Lipetsk site in Q4 2020 and growth of utilization rates at the Russia Long Products segment to 97% (+5 p.p. qoq). 


External sales declined to 3.9 m t (-7% qoq; -13% yoy) due to reduced sales of pig iron and recovering slab deliveries to NLMK USA (241,000 t in Q1 2021) to meet local demand for finished rolled products (in stocks at the end of Q1; will be processed into finished products and sold in Q2).


Sales mix: sales of semi-finished products to third parties decreased by 29% qoq (-27% yoy) to 0.7 m t with recovering slab deliveries to NLMK USA. Slab shipments to NBH decreased by 18% qoq (-35% yoy) to 0.5 m t due to the upgrade of the NLMK La Louvière Hot Strip Mill. Sales of finished products totalled 2.7 m t (+3% qoq; -2% yoy) due to increased demand for rebar and plate. 


Sales on ‘home’ markets increased by 4% qoq (-10% yoy), amounting to 2.7 m t. Sales in Russia increased by 4% qoq to 1.7 m t supported by high demand for long products. In the US, sales growth totalled 16% qoq, reaching 0.4 m t, due to increased capacity utilization. In the EU, sales decreased by 4% qoq to 0.6 m t against the backdrop of planned equipment upgrades. 


Sales on export markets decreased by 21% qoq to 1.2 m t (-12% yoy).


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