18 January 2018

NLMK grew output/sales on improved productivity & demand

Russian steelmaker and miner NLMK saw its steel output and sales rise 3% last year, to 17.1 million mt and 16.5 million mt, respectively. Its capacity utilization rose three percentage points from 2016 to 98%.

Output rose on the back of higher productivity at its Novolipetsk works, as well as at its longs mills in Russia and NLMK USA. Sales growth was driven by home market demand and buying from Europe and the US. Shipments to these markets from NLMK’s mills situated locally rose 4% on year to 10.75 million mt, supported by the 21% growth in sales in the US and the 4% growth in Russian flats sales. NLMK sales in home markets accounted for 65% of its total deliveries.

Sales to external markets, at 5.7 million mt, grew too, by 3% on year due to a 17% increase in the volume of exported pig iron.

In the October-December quarter, NLMK made 4.32 million mt of crude steel, up 2% on year but 2% less on quarter with the latter caused by the seasonal slowdown in demand for long products in Russia and planned maintenance. Despite the decline, Q4 steel sales grew by 3% on quarter to 4.4 million mt thanks to increased exports from NLMK’s mills in Russia, where demand seasonally slowed. In an on-year comparison, Q4 sales jumped by 20% thanks to stronger demand in all the markets where the company operates.

NLMK also managed to ramp up semis exports, which rose 21% on quarter and 49% on year – billet surged 70% and slab 20%. Slab supplies to associated companies grew by 18% on quarter (-5% on year), driven by the 15% increase in sales by NBH, the unit comprising its mills in Belgium, France and Italy.

In October-December, NLMK’s steel sales in home markets, at 2.82 million mt, saw incremental 1% on-quarter decrease due to a 5% seasonal drop in sales in Russia but year on year, home sales shot by 19% driven by 26% hike in Russian sales.