Evraz swings to loss due to fall in steel prices

EVRAZ yesterday slumped to a 119 per cent loss for the first half of the year, as its profits were hurt by falling steel prices.

The Russian miner’s net loss came in at $50m (£31.5m) for the first six months to 30 June, down from $263m over the previous year.

Revenue for the firm, which is part- owned by tycoon Roman Abramovich, also fell by 9.1 per cent to $7.62bn, hurt by reduced sales of steel due to falling demand.

Steel production suffered, due to prices for the silver metal falling by three per cent over the six months.

The FTSE 100 company pointed to a “resilient” Russian steel sector, driven by private sector construction activity as well as Russian government infrastructure projects, as reasons for cheer.

Demand in north America also remained strong over the period, although Evraz admitted disputes at its South African mine had caused production to be halted for a month.

Meanwhile, production of saleable iron ore products increased modestly by one per cent year-on-year to 10.5m tonnes.

Evraz said in its outlook that the steel industry remained “very volatile”, and that it would remain cautious for the rest of 2012.

Broker Michael van Dulken from Accendo Markets said yesterday that Evraz was “following in the footsteps” of its peers, impacted by an uncertain macroeconomic environment and negative mining markets.