Russia’s Evraz hurt by lower steel output

RUSSIAN steelmaker Evraz yesterday posted a three per cent drop in steel production year on year over the three months to September.

The FTSE 250 firm cited lower production at the Vitkovice steel operations in the Czech Republic and Highveld in South Africa for the drop in output. Evraz this month temporarily shut down production at Vitkovice due to low demand.

Evraz added that prices for most steel groups had fallen, due to ongoing uncertainty in global steel markets and falling prices of iron ore and coking coal.

Over the third quarter, North American steel output remained flat quarter on quarter at 611m tonnes, while production of the metal at its South African mill dropped almost 50 per cent to 78m tonnes. Output from Europe dropped almost 59 per cent thanks to a poor performance from its Czech Republic operations.

Elsewhere, coking coal production increased by 20 per cent and steam coal production by 27 per cent quarter on quarter.

Evraz, which has seen a 7.7 per cent rise in construction products output to 1.3m tonnes during the period, said its operations will be affected by seasonal trends in the fourth quarter, including the slowdown in construction in Russia.

Analyst Cailey Barker at Numis labelled Evraz’s third quarter results “slightly negative”.

Earlier this month Evraz announced it had bought a controlling stake in Raspadskaya, Russia’s largest coking coal firm.