PJSC Magnitogorsk Iron and Steel Works (MMK)
PJSC Magnitogorsk Iron and Steel Works: MMK Group Trading Update for Q1 2021
14-Apr-2021 / 08:57 CET/CEST
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014
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MMK Group trading
update for Q1 2021
PJSC Magnitogorsk Iron & Steel Works ("MMK", or the "Group") (MICEX-RTS: MAGN; LSE: MMK), one of
the world's largest steel producers, is pleased to announce its Trading Update for Q1 2021.
14 april 2021
Magnitogorsk, Russia
? Pig iron output increased by 2.0% quarter-on-quarter (q-o-q) to 2,572 thousand tonnes, driven by
the continuing high steel demand.
? Steel output remained broadly flat q-o-q at 3,300 thousand tonnes, reflecting favourable market
conditions.
HIGHLIGHTS
Q1 2021 ? MMK Group's sales of finished products totalled 2,904 thousand tonnes, down 4.6% q-o-q due to the
build-up of metal products inventories ahead of the construction season.
VS Q4 2020
? The Group's sales of premium products fell by 14.1% to 1,154 thousand tonnes due to the restocking
ahead of the construction season and a decrease in Steel Turkey segment's sales.
? MMK Coal's coal concentrate production amounted to 815 thousand tonnes, down 2.6% q-o-q due to
convention loading restrictions and preparation of faces for re-mounting.
HIGHLIGHTS
? Pig iron output increased by 9.2% q-o-q due to the absence of overhauls in blast furnace operations
Q1 2021 during the quarter.
VS Q1 2020
? Steel output increased by 9.2% q-o-q, which was due to the absence of overhauls at converter
facilities and completion of modernisation of Hot-Rolling Mill 2500.
? MMK Group's sales of finished products increased by 5.8% year-on-year (y-o-y) driven by the high
utilisation rate of Mill 2500 after the modernisation.
? Premium products sales dropped by 11.8% y-o-y due to a change in thick plate order mix at Mill 5000
and an increase in intragroup sales of cold-rolled products on the back of the reconstruction of
reverse Cold-Rolling Mill 1700.
? Production of coal concentrate remained flat year-on-year at 815 thousand tonnes.
Global steel products market: In Q1 2021, global prices continued to rise due to the undersupply in key
regions. By late March, prices for flat products hit their record highs in the USA and the EU since 2008,
and in Turkey since 2011. In March, the authorities of the Tangshan municipality, the largest steel
production centre in China, presented a plan to reduce production at most local steel plants by the end
of 2021. Fears of a decline in metal product supply have given a new impetus to price growth in both the
Chinese domestic market and in exports.
Russian steel products market: Prices for flat products continued to grow in Q1 2021 fuelled by high
global prices for metal products, fluctuations in the rouble exchange rate and higher raw materials
prices. There has been a correction in the rebar market, following the growth in late Q4 2020. Closer to
the end of Q1 2021, prices for rebars began to recover due to renewed growth in scrap prices and improved
demand ahead of the construction season.
Global iron ore market: Average values of the 62% Fe iron ore index remained high in Q1 2021 (USD 165 -
USD 170 per tonne CFR China). China's consumer demand for iron ore was low since the beginning of the
year, with restrictions imposed in Tangshan in March further subduing demand for the raw materials and
minimising the risks of physical shortages of iron ore in China in 2021.
MARKET
OVERVIEW Russian iron ore market: In the first quarter, demand for raw materials was quite strong both in the
domestic and in key export markets. Since Q4 2020, iron ore exports from Russia to Europe and Turkey have
been growing, with the rapid increase in prices in these markets further contributing to soaring prices
for Russian consumers.
Global coking coal market: The global market remained volatile in the first quarter due to China's
ongoing ban on coal imports from Australia. Prices for alternative supplies to China consolidated around
USD 200 - USD 220 per tonne, while prices for Australian imports returned to USD 110 - USD 120 per tonne
FOB amid the ongoing glut in available raw materials. The likelihood that the ban will be lifted soon is
no longer assessed as high by market players.
Russian coking coal market: Prices in the Russian market grew by more than 50% in Q1 2021. This strong
rise was driven by the low base effect of former prices. There are no any drivers for price changes for
coking coal on the Russian market, which could lead to significant price fluctuations in Russia before
the end of 2021.
Russian metal scrap market: Scrap prices in the Russian market peaked in early 2021, but then declined
due to the introduction of an increased duty on scrap exports from Russia. However, this decline was
short-lived, with seasonality and high prices for metal products preventing scrap prices from falling
significantly. MMK GROUP'S CONSOLIDATED RESULTS
thousand tonnes Q1 2021 Q4 2020 % Q1 2021 Q1 2020 % Crude steel production 3,300 3,312 - 0.4 3,300 3,022 9.2 Pig iron production 2,572 2,521 2.0 2,572 2,355 9.2 Coal concentrate production 815 837 - 2.6 815 814 0.2 Iron ore production 631 638 - 1.0 631 658 - 4.0 Finished products sales, 2,904 3,045 - 4.6 2,904 2,745 5.8 including: Slabs and billets 53 0 - 53 0 - Long products 268 297 - 9.8 268 357 - 24.7 Flat hot-rolled products 1,428 1,404 1.7 1,428 1,080 32.2 Premium products, including: 1,154 1,343 - 14.1 1,154 1,308 - 11.8 Thick plate (Mill 5000) 165 202 - 18.3 165 231 - 28.6 Flat cold-rolled products 184 226 - 18.4 184 245 - 24.7 Downstream products, including: 805 916 - 12.1 805 833 - 3.4 Tinplate 43 38 14.9 43 42 4.1 Galvanised steel 439 460 - 4.6 439 443 - 1.1 Polymer-coated steel 150 200 - 24.8 150 140 7.3 Band 35 42 - 15.2 35 32 11.4 Formed section 26 36 - 28.0 26 44 - 41.9 Pipe 12 24 - 48.4 12 13 - 3.3 Metalware 97 111 - 12.2 97 108 - 9.8 Other metal products 2 6 - 72.0 2 11 - 84.8 Share of premium products 39.7% 44.1% 39.7% 47.7%
CONSOLIDATED PRICES
FOR METAL PRODUCTS
USD/tonne Q1 2021 Q4 2020 % Q1 2021 Q1 2020 %
Average price per tonne: 713 575 24.0 713 591 20.6
Slabs and billets 568 - - 568 - -
Long products 633 493 28.4 633 497 27.4
Flat hot-rolled products 638 514 24.1 638 520 22.7
Premium products, including: 832 657 26.6 832 675 23.3
Thick plate (Mill 5000) 667 593 12.5 667 688 - 3.1
Flat cold-rolled products 731 573 27.6 731 602 21.4
Downstream products, including: 889 691 28.7 889 692 28.5
Tinplate 736 672 9.5 736 773 - 4.8
Galvanised steel 853 659 29.4 853 651 31.0
Polymer-coated steel 1,121 852 31.6 1,121 827 35.6
Band 798 600 33.0 798 663 20.4
Formed section 863 621 39.0 863 760 13.6
Pipe 706 538 31.2 706 555 27.2
Metalware 820 627 30.8 820 659 24.4
Other metal products 1,100 777 41.6 1,100 692 59.0
+ 24.0% Q-o-Q
Average selling prices for Q1 2021 grew by 24.0% q-o-q in Q1 2021 to USD 713 per tonne, driven by a
AVERAGE significant increase in global prices for metal products amid global supply constraints. Prices grew by
SELLING PRICE 20.6% y-o-y driven by favourable pricing conditions in the global steel markets.
MMK GROUP'S PERFORMANCE
ACROSS CORE SEGMENTS
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April 14, 2021 02:57 ET (06:57 GMT)
