EVRAZ Q2 operating results

In Q2 2015, EVRAZ steel production reached 3.4 million tonnes, down 14 percent quarter-on-quarter due to the deconsolidation of EVRAZ Highveld Steel and Vanadium (EHSV) and maintenance work at Russian steel mills. Steel production excluding rolls was down 14 percent quarter-on-quarter to 3.15 million tonnes as a result of the above factors and weak pipe demand in North America.

The share of finished steel products in production in the second quarter of 2015 increased to 65 percent from 61 percent in the first quarter of this year due to a decrease in the production of semi-finished products in Russia as a result of a shutdown for scheduled repairs and to support the growing demand for construction and railway metal products in Russia ... In Q2 2015, convenience food prices declined in line with global benchmarks. Construction goods prices in dollar terms were flat QoQ. Manufacturing of construction products rose 1 percent quarter-on-quarter, reflecting some recovery in the domestic construction sector.

The production volumes of rolled steel increased due to the growth of orders for the supply of rails and truck wheels from the Russian railways and the CIS, as well as stable demand in the United States. The production of railroad products, including rails, increased by 9 percent. Railway product prices improved in dollar terms on the back of a change in product mix and the strengthening of the ruble.

North American tubular production declined due to declining exploration and energy activities, as well as a seasonal downturn negatively affecting oil country tubular demand.

Coking coal feedstock yields and coking coal concentrate production fell 30 percent and 8 percent QoQ, respectively, due to reduced productivity at Raspadskaya and Yuzhkuzbassugol as a result of planned cleanup and adjustments to production plans in response to weak market demand.
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