EVRAZ Q4 2012 and FULL YEAR 2012 PRODUCTION REPORT

evrazQ4 2012 OPERATIONAL HIGHLIGHTS and RECENT DEVELOPMENTS:

  • Consolidated crude steel production and gross output of steel products both decreased by 6% compared to Q3 2012, mainly due to a scheduled maintenance at EVRAZ ZSMK. The temporary suspension of work at EVRAZ Vitkovice‘s steel shop in the Czech Republic also contributed to the decrease in crude steel output
  • Consolidated production of finished steel goods was largely flat quarter-on-quarter, whilst the proportion of finished steel products in EVRAZ’s total output increased to 80% in Q4 2012 compared with 73% in Q3 2012
  • Consolidated output of iron ore products remained broadly flat vs. Q3 2012 with increased output of sinter and pellets countering lower output of saleable concentrate in Russia
  • Raw coking coal production at Yuzhkuzbassugol decreased by 6% compared to Q3 2012, mostly due to a scheduled two-month longwall repositioning at the Osinnikovskaya mine
  • Production at EVRAZ ZSMK rail mill was recommenced on 15 January 2013 following the successful completion of the modernisation project
  • EVRAZ NTMK has completed the implementation of the PCI project, which is expected to reach designed technical parameters in Q1 2013
  • Production of crude steel at EVRAZ Vitkovice in the Czech Republic resumed in January 2013, while the rolling mills had been in operation in Q4 2012

FY 2012 OPERATIONAL HIGHLIGHTS:

  • Consolidated crude steel production and gross production of steel products decreased by 5% and 4% respectively vs. 2011 mainly due to a higher number of overhauls at the Russian steel mills which were mostly related to implementation of the modernisation programme, but also due to the temporary suspension of crude steel production at EVRAZ Vitkovice‘s steel shop in the Czech Republic to reduce slab inventory
  • In 2012, the reconstruction of the rail mills at EVRAZ NTMK and EVRAZ ZSMK was largely completed, as well as implementation of PCI at NTMK. In 2013, the periods of suspension of production due to such overhauls are expected to reduce as the current modernisation programme nears completion
  • In 2012, the share of finished steel products as a percentage of total steel products’ output remained flat at 77% compared to 2011. With increased rolling capacity following the rail mill modernisation, share of finished products in 2013 is expected to grow improving the product mix
  • Production of saleable iron ore products decreased by 2% in 2012 compared to 2011 mainly due to the termination of processing of third party raw ore at certain Russian operations, which became uneconomic in the current market environment
  • Production of raw coking coal was 35% higher compared to 2011 due to more stable operation at the Yuzhkuzbassugol mines as a result of the successful implementation of the operational improvement programmes
  • Average selling prices for most key steel product groups moderately fell over the year in the challenging macroeconomic environment.
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