In Q2, NLMK Group’s steelmaking capacity utilisation rates continued to improve. Crude steel production amounted to 3.842 million t (+5.7% q-o-q), of which 93.6% was produced domestically. The production of finished steel increased to 4 million t (+7% q-o-q).
Total sales remained largely in line with the previous quarter’s level at 3.8 million t (-1.6% q-o-q). High seasonal demand from the domestic construction segment partially offset the softening in consumer activity in the export markets. Sales of long products and metalware increased substantially (by over 20% q-o-q). Q2 domestic sales accounted for 37% of total steel product sales (+3 p.p. q-o-q). The share of finished steel in total sales increased
3 p.p. q-o-q to 74%. Sales of slabs to the Group’s EU and US operations increased to 0.753 million t (+5.5%).
OUTLOOK
In Q3, NLMK’s crude steel production is expected to remain stable despite the price softening in the steel market that started in the second half of Q2.
We expect Q2 consolidated financial results to be stronger than Q1 results. Sales revenue is expected to be around $3.2 billion, and EBITDA margin may reach around 18%.