Jastrzebska Spólka Weglowa S A : Information concerning the JSW Group’s operating activity in Q4 2020

JSW Group's operating activity in Q4 2020

In Q4 2020, total coal production in the JSW Group was 3.77 million tons while coke production was 0.93 million tons.

Its operating results are depicted in the table below:

										Period
	Production ratios			Unit
							Q4 2019			Q3 2020			Q4 2020
		Coal segment
	(a+b) Total coal production:					3.90		3.95		3.77
	a) Coking coal production					2.59		2.98		2.81
	b) Steam coal production			million		1.31		0.97		0.96
	(a+b) Total coal sales:				3.70		3.68		4.00
				tons
	a) Coking coal sales				2.32		2.72		3.03
	inc. internal sales					0.89		1.13		1.25
	b) Steam coal sales					1.38		0.96		0.97
		Coke segment
	Total coke production			tons	million	0.68		0.85		0.93
	Sales of coke				0.58		1.00		0.95

Coal and coke production in the JSW Group

The operating results of the coal segment in Q4 2020 were as follows:

• total coal production was 3.77 million tons, down by approx. 4.5% compared to Q3 2020 and approx. 3.4% compared to Q4 2019;
• coking coal production was 2.81 million tons, down by approx. 5.5% compared to Q3 2020 and up by approx. 8.5% compared to Q4 2019;
• steam coal production was 0.96 million tons, down by approx. 1.3% compared to Q3 2020 and up by approx. 26.9% compared to Q4 2019;
• total coal sales was approx. 4.00 million tons, up by approx. 8.7% compared to Q3 2020 and approx. 8.2% compared to Q4 2019;
• total coking coal sales was approx. 3.03 million tons, up by approx. 11.7% compared to Q3 2020 and approx. 30.9% compared to Q4 2019;
  inc.: internal sales was approx. 1.25 million tons, up by approx. 10.5% compared to Q3 2020 and approx. 39.5% compared to Q4 2019;

• total steam coal sales was approx. 0.97 million tons, up by approx. 0.2% compared to Q3 2020 and down by approx. 30.0% compared to Q4 2019.

Coal sales to external customers in Q4 2020 accounted for approx. 69% of the total volume.

Total coke production in Q4 2020was 0.93 million tons, up by approx. 9.1% compared to Q3 2020 and approx. 36.0% compared to Q4 2019.

Total coke sales in Q4 2020was 0.95 million tons, down by approx. 4.6% compared to Q3 2020 and up by approx. 65.3% compared to Q4 2019.

Market conditions in Q4 2020

In Q4 2020, the hard coal price set using the Nippon Steel method based on the average index basket from the September-November period increased by about 5% from the price set for the previous period.

For transactions based on spot prices, The Steel Index (TSI), comprising a hard coal basket, is becoming the most important guidance. The average of daily quotations of this index for Q4 2020 compared to the Q3 2020 average dropped by approx. 5%.

The average of daily quotations of the semi-soft coal index for Q4 2020 compared to the Q3 2020 average rose by approx. 10%.

The estimate average price (in PLN) of coking coal sold by JSW to external offtakers in Q4 2020 in relation to the previous quarter decreased by approx. 4%. Converted into USD at the National Bank of Poland's average exchange rate in a given quarter, the decrease was approx. 3%.

The estimate relation of the prices of the coking coal sold by JSW in Q4 2020 (converted into USD) to the Nippon Steel index was 88%, and to TSI - 94%.

Polish Steam Coal Market Index (PSCMI1) in sales to the commercial and industrial energy sector dropped in Q4 2020 by approx. 1% compared to the previous quarter (data for October- November 2020).

The average price of steam coal sold by JSW in Q4 2020 in relation to the previous quarter decreased by approx. 1%.

The quotations of blast furnace coke in the European market in Q4 2020 rose by approx. 2% compared to the quarter before.

The average total coke price (in PLN) based on FCA sold by the JSW Group in Q4 2020 rose by approx. 5% compared to Q3 2020.

Converted into USD at the National Bank of Poland's average exchange rate in a given quarter, the increase was approx. 6%.

Data source: Platts, Coke & Anthracite Market Report