Page 154 - RusRPTAug22

9.2.11 Mines and Minerals - gold & diamonds
Polymetal released 2Q22 Operating Results. The company demonstrated quite weak performance – both gold and silver production slid more than 9% y/y to 271koz and 4.3moz, respectively, on lower grades and planned long maintenance, while sales fell 40% as the company redirects its sales to other market, primarily to Asia.
● Gold sales slipped c29% q/q and c40% y/y to 189koz
● At the same time, silver sales marginally climbed c2% y/y to 4.4mnoz
● The company’s revenue was down c30% q/q and c36% y/y to $433mn
9.2.12 Mines and Minerals - steel & iron
MMK to lower flat steel supply by c42% vs 2021 average to 405kt in July – Metal Expert. In particular, HRC domestic shipments are expected to decrease by c12% vs 2021 average level to 299kt, while export supplies are to collapse c81% to 48kt, Metal Expert assesses.
NLMK released 2Q22 operating results. The steelmaker’s performance was expectedly soft, however the results were better than those of Severstal and MMK. Sales on NLMK’s “home” markets declined by 3% q/q and 7% y/y to 2.6mt amid weak demand on Russian market. Export sales plunged 33 % q/q and 17 % y/y to 1.2 mt. Steel sales from NLMK Russia Flat and NLMK Russia Long dropped c8% q/q and c11% y/y to c3.9mt Expectedly weak, but outlook is improving. Weak results did not come as a surprise given export restrictions imposed against Russian steel and soft demand in the local market. However, NLMK is less exposed to sanctions due to its strong positions on European semi-finished steel market. Going forward, we believe the expected ruble depreciation as well as the demand rebound in China should support its operations.
NLMK reduced steel output by c1mt YTD – Interfax. NLMK's CEO Vladimir Lisin said yesterday that the company cut steel production this year already by 1mt. Note that the company produced 17.2mt in 2021. Additionally, the steelmaker would postpone the realization of investment programs due to issues with equipment, though scope of the program was confirmed. He added that Russian steelmakers supply steel to Asia at cost – the profitability of exports in this direction is undermined by high freight rates and relatively low prices due to the surplus of steel in China.
154 RUSSIA Country Report October 2020 www.intellinews.com