MMK Group highlights by key segments
1. Pig iron output in FY 2018 decreased by 3.0% y-o-y. This was due to the scheduled maintenance work at blast furnace No. 1 and large volume of minor maintenance works at other blast furnaces over 2018.
2. Steel output in Q4 2018 declined by 7.8% q-o-q due to lower capacity utilisation of electric-arc furnaces amid scheduled maintenance works and higher scrap prices.
3. Despite lower steel production in FY 2018 (down 1.5% y-o-y), shipments of finished products for the same period grew 0.7% y-o-y owing to decreasing warehouse stocks of finished products.
4. Sales of finished products in Q4 2018 declined 6.5% q-o-q to 2,812 thousand tonnes. This decline was mainly due to the seasonal weakness of business activity on the domestic market.
5. In Q4 2018 domestic shipments declined by 6.5% q-o-q due to seasonally weak demand. However, in FY 2018, domestic shipments grew 5.9% year-on-year to 9,029 thousand tonnes, while the share of domestic sales exceeded 79%, compared to 75% in 2017.
6. In Q4 2018, shipments of long products decreased by 12.1% q-o-q to 423 thousand tonnes. This decline was due to seasonally weak domestic demand for construction products. However, in FY 2018, overall shipments of long products grew 0.5% y-o-y, owing to both the continued increase in demand for steel on the Russian market and higher sales volumes at the metalware branch of MMK Group.
7. Shipments of hot-rolled products in Q4 2018 declined 7.5% q-o-q. This decline was mainly due to lower shipments to pipe manufactures and correction of prices for hot-rolled steel on export markets.
8. The decrease in shipments of hot-rolled products in FY 2018 by 3.0% y-o-y was due to higher sales of HVA products.
9. Shipments of HVA products in FY 2018 increased 5.7% y-o-y and totalled 4,380 thousand tonnes. This growth was mainly due to the new hot-dip galvanising line reaching full capacity, higher sales of cold- rolled products to the Lysvensky Metallurgical Plant, and higher sales of other downstream products on the domestic market.
10. The increase in shipments of cold-rolled products in FY 2018 by 8.5% y-o-y, or by 112 thousand tonnes, was mainly due to higher shipments of semi-finished rolled stocks to the Lysvensky Metallurgical Plant.
11. In Q4 2018, shipments of Mill 5000 products were nearly flat q-o-q with capacity utilisation of 100%. In FY 2018, thick plate shipments slightly grew y-o-y.
12. Despite seasonally weak demand for construction products, galvanised steel shipments in Q4 2018 remained flat q-o-q and totalled 315 thousand tonnes. In FY 2018, the Company shipped 1,269 thousand tonnes of galvanised steel, up 12.0% y-o-y. This significant growth was due to the new hot- dip galvanising line reaching full capacity, which amid stable demand from the construction industry allowed the Company to continue substituting imports of this product. In FY 2018, the Company also increased shipments to carmakers.
13. Lower shipments of polymer-coated metal in FY 2018 were due to both higher sales of galvanised steel and changes in the reporting of product sales by Lysvensky Metallurgical Plant following its acquisition in late 2017.
14. Sales of formed section in FY 2018 grew 35.7% y-o-y due to consistently high demand from railcar manufacturers.
15. The average sales price in US dollars in Q4 2018 decreased by 5.1% q-o-q to USD 579 per tonne. This decrease was due to the correction in global steel prices and devaluation of the rouble vs the dollar during the quarter.
16. In FY 2018, the average sales price for the Company’s products grew 8.0% y-o-y to USD 621 per tonne.
Source : Strategic Research Institute