January 18, 2018 / 8:39 AM / 2 years ago

Russia's Evraz crude steel output rose 3.8 pct in 2017

MOSCOW, Jan 18 (Reuters) - Russian steelmaker Evraz said on Thursday that its crude steel output had risen by 3.8 percent in 2017 compared to a year earlier, thanks to higher demand and the completion of repairs to some of its blast furnaces.

The integrated steel and mining company, part-owned by Chelsea soccer club owner Roman Abramovich, said it produced 14 million tonnes of crude steel in 2017, compared to 13.5 million the previous year. It was aided by stronger demand in North America and the completion in 2016 of capital repairs to blast furnaces at its eastern-most steel mill ZSMK.

In the last three months of 2017, Evraz saw production of crude steel at 3.5 million tonnes, unchanged from the previous quarter. A slight rise in output was expected in the first quarter of 2018, the company said.

As China, the world leader in steel production, imposes curbs on its output in an attempt to tackle smog, Russian steelmakers have been given some breathing space.

Global steel prices have improved, bringing Evraz and other Russian producers out of a two-year downturn which was sharpened by a slowdown in the Russian economy fuelled by low oil prices and Western sanctions over Moscow’s role in the Ukraine crisis.

Evraz announced in August last year its first divided payment since 2014.

“We see Evraz’s numbers as strong and anticipate material improvement of the company’s EBITDA (earnings before interest, taxation, depreciation and amortisation) and FCF (free cash flow) in 2H17,” Oleg Petropavlovsky, analyst at BCS Global Markets, said in a note.

Evraz is also Russia’s top producer of coking coal, and saw raw coking coal production rise 4.7 percent in 2017 year-on-year, due in part to higher output from its Raspadskaya coal mine.

On a quarterly basis, raw coking coal output decreased 7.7 percent compared to the third quarter, due to scheduled longwall repositioning at the Alardinskaya and Uskovskaya mines, it said. (Writing by Polina Ivanova; Editing by Alexander Smith)

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