Magnitogorsk Iron and Steel Works (MMK) – one of the world’s largest steel producers and a leading Russian steel producer has announced its (Jul-Sep) Q3 CY’19 results. Below are the key highlights:
1.Crude steel production inch up 3% in Q3- MMK Group has churned out 3.194 MnT of crude steel in Q3 with an increase of 3% as against 3.091 MnT in preceding quarter.
However, during the nine months (Jan-Sep) CY’19, company’s crude steel output inched down by 2% to 9.392 MnT in comparison with 9.552 MnTin same time frame of CY’18.
2. Pig iron output up by 4% Q-o-Q in Q3- Company’s pig iron output increased by 4% to 2.560 MnT which was 2.45 MnT in previous quarter.Also in 9MCY19 the same inched up by 2% to 7.409 MnT which was 7.301 MnT in corresponding time frame of previous year.
3.Finished steel shipments up by 2% Q-o-Q in Q3- In Q3 the company successfully shipped out 2.787 MnT of finished steel products an uptick by 2% over 2.730 MnT in previous quarter.
During the nine months CY’19 the same fell by 4% to 8.248 MnT as against 8.599 MnT in same time frame of previous year.
4.Domestic steel shipments uptick by 4% in Q3- MMK (Russia +CIS ) increased its steel shipments by 4% to 2.541 MnT in Q3 which was 2.444 MT in Q2. Strong demand on the domestic market allowed the company to increase its domestic shipments. As per company reports, MMK was successful in serving 91% of domestic steel demand in Q3.Meanwhile, in 9M CY’19 the same increased by 9% to 7.427 MnT in comparison with 6.842 MnT in 9M CY’18.
5.Exports decline by 14% in Q3- In Q3 the company booked 0.246 MnT of steel products for exports, down by 14% as compared to 0.286 MnT in Q2. Meanwhile in 9MCY19 the same plunged by 53% to 0.821 MnT which was 1.756 MnT in 9MCY18.
6.Strong demand in construction boost Long products shipments in Q3- Seasonally strong demand from construction sector resulted to surge in Long products shipments by 4% to 0.470 MnT as compared to 0.452 MnT in the preceding quarter. Due to this company maintained their capacity utilization rate of long products equipment at close to 100% level.
However, in the 9M CY’19 long steel shipments remained largely stable and stood at 1.379 MnT over 1.372 MnT in 9M CY’18
7.Hot-rolled products shipments up by 4% in Q3- Successful reconstruction of mill 2500 in Q2 CY’19 led to a 4% growth in flat hot-rolled shipments to 1.207 MnT in Q3 in comparison with 1.166 MnT in Q2.
8.Hike in cold rolled product shipments in Q3– Increase in the volume of shipments of cold-rolled products for Q3 2019 by 10% q-o-q to 0.322 MnT was mainly due to the completion of equipment maintenance in Q2 2019 and continued high demand on the domestic market.
9.Shipments of galvanized steel down by 3% in Q3- Shipments of galvanized steel decreased by 3.2% q-o-q and amounted to 0.327 MnT which was 0.338 MnT in previous quarter. This decrease was due to a more complex sales mix and the increase in sales of polymer coated steel by 10.2% on quarterly basis
However in 9MCY19 the same move up by 2.4% to 0.976 MnT against 0.954 MnT in same time frame of previous year due to high demand from the automotive and construction industries on the domestic market,
10.Average prices of flat & Long steel products in Q3CY19- In Q3CY19 company’s long steel prices on an average basis stood at USD 493/MT down by 3% against USD 510/MT in previous quarter. This decrease was due to a significant correction in global steel prices.Meanwhile on an average basis hot rolled prices stood at USD 551/MT remain largely stable in both quarters.
Outlook for Q4 CY’19- Amid the twin effects of overseas steel prices undergoing correction amid weakened global market sentiments and upcoming winter season in Nov shall effect company’s performance in Q4. However higher operational efficiency and capacity utilization in high-margin production units will help in compensating negative factors caused due to weakening sentiments in global market.
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