Page 133 - RusRPTNov22

appears a significant decline compared to our previous baseline, in which we assumed no new sanctions. However, EBITDA should be down only 2% in 2025E vs 2023E level, as the restrictions take effect in two years. Europe has high reliance on Russian semi-finished steel products (roughly, 80% of the products come from Russia and Ukraine). The absence of Russian semis would likely result in severe issues for the European steel segment, and NLMK’s assets in the EU are likely to be shut down due to low availability of slabs globally.
MMK released 3Q22 Trading Update. The company’s operationals have been weaker than peers’ results. Steel production contracted q/q and y/y, steel sales recovered q/q, but remained flat y/y.
● § Steel output fell by 3% q/q to 2.8mt and dropped 18% y/y primarily amid decrease of the production at the Turkish segment
● § Total steel sales increased by 17% q/q to 2.8mt and were flat y/y in light of demand’s recovery in Russia and clearance of stocks
● § Realized steel prices fell by 17% q/q to $855/t and declined 17% y/y, driven by a price contraction in the domestic market on strengthening of competition
● § Coking coal concentrate production declined by 5% q/q to 877kt, though up 1% y/y
● § Note, the steelmaker marginally increased domestic sales by 1% y/y to 6.7mt, while materially lowered exports by 44% y/y to 1.3mt in 9M22
Minpromtorg proposed to exempt Mechel’s Izhstal from steel excise tax,
Metal Expert informs. According to the project presented on the official portal of the Ministry, the list of enterprises that are proposed to be exempt from excise tax includes Izhstal, Ural Steel, as well as 8 more foundry and rolling enterprises. Note Izhstal produced 136kt of steel in 8M22 (+4% y/y), per Metal Expert.
Severstal released 3Q22 operating results. The company’s results saw some improvements q/q mainly in light of a low base previous quarter. Steel output increased by 10% q/q to 2.6mt, while fell 8% y/y
Net steel sales rose by 38% q/q to 3.1mt and gained 16% y/y
Iron ore went up by 8% q/q to 4.5mt, while declined 1% y/y on improved demand in the domestic market
The company decided not to disclose financial results for 9M22 amid business restructuring
9.2.13 Mines and Minerals - fertilisers
Russia’s production of mineral fertilizers decreased by 9.9% in January-September y/y to 17.7mn tonnes, the State Statistics Service (Rosstat) reported on October 26.
133 RUSSIA Country Report November 2022 www.intellinews.com