Sales volumes review
In 2018 external steel product sales volumes decreased by 7.6%. The main reasons for this reduction were: the disposal of Ukrainian asset EVRAZ DMZ; lower pig iron production as the new blast furnace No. 7 was launched while simultaneously shutting down blast furnace No. 6 at EVRAZ NTMK; and the general overhaul of blast furnace No. 3 at EVRAZ ZSMK. Sales volumes of semi-finished steel products to third parties decreased by 18% in 2018. Meanwhile, railway product sales rose by 5%, buoyed by strong demand.
Overall, EVRAZ sales volumes of key finished products in Russia mainly increased during the reporting period. Continued high demand from freight car building and repairing companies led to a 28% year-on-year surge in wheel sales. Rail sales were up 4% amid higher purchases by Russian Railways. Beam sales in Russia also improved by 5% thanks to EVRAZ customer focus initiatives and import displacement. Rebar sales volumes in Russia increased by 10%. Structural product shipments were down by 7%.
The Group remains focused on maximising the share of sales in the long product segment on the local Siberian market. The market share for beams in Russia expanded to 63%, compared with 56% the previous year. Due to the growth of supplies to Russian Railways, EVRAZ market share in rails rose from 69% to 77%. In 2018, the Group’s share on the structural product market was 45%. The share of the grinding ball market remained at the level of the previous year at 62%, at the same time EVRAZ increased sales in a growing market as EVRAZ NTMK put into operation the new grinding ball mill.
In 2018, EVRAZ Caspian Steel’s rebar sales increased by 35% to 176 thousand tonnes due to higher demand for rebar in Kazakhstan and the signing of a major contract.
The Group’s finished vanadium product sales volumes dropped by 19% to 12.4 thousand tonnes in 2018, compared with 15.2 thousand tonnes of pure vanadium in 2017. The reduction is explained by higher sales volumes during 2017 (higher oxide availability resulting from conversion at third parties of slag stocks and Nitrovan sales from EVRAZ Vametco deconsolidated in April 2017), production downtime at the beginning of the year due to the launch of blast furnace No. 7 and major maintenance work at EVRAZ Vanady-Tula to reline the roasting kiln refractories and replace the grinding mill.
The Group sold 2.0 million tonnes of iron ore pellets to third parties in the year, up 14% year-on-year, due to increased supplies to export destinations, in particular Turkey and China.
|Africa, America and the rest of the world||695||1,141||(39.1)|
|Steel products, external sales||10,980||11,879||(7.6)|
|Other steel products||619||601||3.0|
|Steel products, inter-segment sales||573||587||(2.4)|
|Total steel products||11,553||12,466||(7.3)|
|Vanadium products (tonnes of pure vanadium)||19,194||22,110||(13.2)|
|Vanadium in slag||6,842||6,897||(0.8)|
|Vanadium in alloys and chemicalsThere are some differences from the figures for 2017 that were published in the previous annual report due to adjustments in the sales volumes of vanadium products.||12,352||15,213||(18.8)|
|Iron ore productsOther iron ore products include sales of 1,126 kt of sinter from related party to EVRAZ DMZ (by EvrazTransUkraine).||3,112||2,937||6.0|
|Iron ore concentrate||8||25||(99.3)|
|Other iron ore products||1,132||1,186||(4.6)|