In the 2 quarter of 2009, NLMK Group companies were produced 2.6 million tons of steel, which is 24% more than in the 1 quarter of 2009. Capacity utilization for smelting steel was about 92%, including at the main production site in Lipetsk - 98%.
The production of finished products amounted to 2.4 million tons, a 18% increase over the 1 quarter of 2009, the realization of finished goods fell by 3% compared with 1 quarter and amounted to 2.3 million tons.
In the 1 quarter of 2009 was realized a significant amount of stocks of finished products, located on a balance of trading companies of the group that identified the reduction of total sales in the 2 quarter by 3%, despite an increase in the level of production, the report says NLMK.
In comparison with the previous quarter, in the 2 quarter of 2009, significantly, to 0.8 million tons, increased by the implementation of commodity slabs (excluding sales to DanSteel A /S, which amounted to 41 thousand tons). 197 thousand tons of this amount was sold to joint venture companies with Duferco, which is 31% lower than in the 1 quarter of 2009.
In the 2 quarter of 2009 the volume of sales of steel products amounted to 2.274 million tons. Major decline in sales has affected the implementation of cast iron, hot-rolled, cut and grade bars. Sales of pig iron for the whole group amounted to 0.015 million tonnes, the data on OJSC NLMK - 0,090 million tonnes. Grew sales of flat rolled products with high added value - rolled with the polymer-coated (40%).
In the first place, it is connected with the decline of stocks in end-consumer products and metalloservisnyh companies, as well as the seasonal increase in domestic demand from the construction sector, the report says the company.
In addition, the Group has increased the realization of metal products by 36% compared with 1 quarter of 2009 - up to 0.05 million tons. C Given the period of trading (on the date of shipment from the factory before the final buyer of the property right) NLMK Group sales in the 2 quarter of a large shipment of a quarter 1. Thus, the sales volumes of NLMK group influenced the low production and poor market conditions in 1 and 2 early in the quarter, the report says the company.
These factors, as well as increasing the proportion of sales of lower reinforced also affect impact on financial performance quarter 2.
By the end of 2 quarter saw a recovery in demand, both domestic and foreign markets against the backdrop of an appropriate price stabilization, primarily due to replenishment of stocks potrebiteleyami.
In the 2 quarter of 2009, production began on the main production site in Lipetsk - NLMK - totaled 2.2 million tons, 30% more than in the 1 quarter of 2009. This is primarily due to start in May 2009, blast furnace number 4 power of 1.7 million tons a year and a general increase in capacity utilization to 100% by the end of 2 quarters.
sales for 2 months in 2009 as a whole exceeded the Tier 1 quarter of 2009, however, this figure is still below the 2 quarter of 2008. The increase in sales volume occurred due to increased exports of slabs. Decreased sales of the transformer were connected to a stop shop for production of transformer steel for repairs in order to improve production efficiency and improve the quality of our products. At the same time has been increased loading subsidiary OOO VIZ-Stal ', which transferred all orders.
The decline in orders for products DanSteel A /S in the 2 quarter, related to the ongoing crisis, has led to a reduction in the implementation of rolled plates on this period. Prices for the products DanSteel A /S in the 2 quarter is also exist below the previous quarter.
Reducing the volume of sales Beta Steel Corp. The reason for the continuing fall in demand. Mid-June showed a slight improvement in the market associated with the provision of service centers. In general, the selling price in the 2 quarter of 2009 reached the minimum values and at the end of the period started to show upward momentum.
The main reason for the increase in sales transformer steel OOO VIZ-Stal in comparison with the previous quarter has been a portfolio NLMK after the stop shop for production of transformer steel in Lipetsk.
Average prices for transformer steel in the 2 quarter of 2009 slightly decreased (- 6%).
volumes of iron ore concentrate and aglorudy OAO Stoilensky GOK increased compared with the previous quarter by 69% and 86%, respectively, due to growth in the implementation of the Group of NLMK, and to other consumers. In the 2 quarter of decline in prices for iron raw materials on the same quarter of 2008.
Increased sales of coke OJSC Altai-coke as compared with the previous quarter due primarily to growth in steel production at the production site in Lipetsk, as well as the closure of a two coke batteries. These factors influenced the growth of total load capacity of OJSC Altai-coke in the 2 quarter of 2009 to 70%. In the 2 quarter witnessed a further decline in average selling price of coke, as compared with 1 quarter of 2009.
In the 2 quarter of 2009, steel production Maxi-Group was 429 thousand tonnes, which is 13% more than in the 1 quarter of 2009. Increased sales of cast billets on the previous quarter was 94%. This increase relates primarily to the terms of the current number of export contracts, specifying the transition of ownership upon full payment for the delivered products. As a result, 20 thousand tons of billets grade, shipped for export in the 1 quarter of 2009, sales were recorded in 2 quarters. In the 2 quarter also decreased the use of blanks for the manufacture of fittings and wire rod due to increased export demand for solvent blanks. Increased sales of metal products (36% compared with 1 quarter of 2009) was due to increased demand from the construction and trading companies.
In the beginning of the quarter 3 should be noted the increased demand for metal products in the domestic market. This first led to an increase in sales of galvanized rolled and rolled with polymer coatings, as well as bars, namely, valves and wire products. The main reason for the observed revitalization is the replenishment of consumers, as well as seasonal revival in the construction market.
orders in July-August is also an improvement in demand from foreign buyers. Among the export markets, the most active in 3 quarter of 2009 is observed in the Middle East and SEA. Slabs, billets and hot rolled enjoy steady demand today. The level of export prices for these products in the 3 quarter of 2009 is expected higher than in the 2 quarter of 2009. The main factors influencing the current increase in prices are low levels of stocks and a seasonal increase in demand with limited production volumes, - said NLMK.
NLMK Group expects that the financial results for the 2 quarter did not demonstrate a significant positive momentum. At the same time, the cost of production of 1 ton of steel in the 2 quarter of 2009 decreased by 15-20% compared with 1 quarter of 2009. This reduction was achieved mainly due to lower prices for raw materials used in the 2 quarter of 2009, unlike the situation in the 1 quarter of 2009, when used in stocks of raw materials purchased in previous periods of higher prices. In addition, to reduce the cost per ton in the 2 quarter impacted the overall increase in capacity utilization, as well as measures taken by management to streamline costs.
It was expected that the cost-effectiveness in terms of EBITDA in the quarter 2 will remain at 15-20%. In the 3 quarter of the year can be expected to improve financial performance groups, the report says NLMK.
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