Novolipetsk Steel announces the following regular trading update for Q4 2008 and FY 2008.
Novolipetsk
| | Q4'08 | Q3'08 | Change | 2008 | 2007 | Change |
| Pig iron | 1.367 | 2.214 | ‐38.3% | 8.408 | 9.056 | ‐7.2% |
| Slabs | 0.591 | 0.980 | ‐39.7% | 3.612 | 3.724 | ‐3.0% |
| Hot‐rolled steel | 0.261 | 0.430 | ‐39.3% | 1.719 | 1.953 | ‐12.0% |
| Cold‐rolled steel | 0.249 | 0.401 | ‐37.8% | 1.494 | 1.454 | 2.8% |
| HDG steel | 0.088 | 0.129 | ‐31.7% | 0.450 | 0.475 | ‐5.1% |
| Pre‐painted steel | 0.066 | 0.102 | ‐34.7% | 0.357 | 0.344 | 3.9% |
| Dynamo steel | 0.045 | 0.094 | ‐52.4% | 0.318 | 0.376 | ‐15.3% |
| Transformer steel | 0.038 | 0.044 | ‐11.9% | 0.164 | 0.139 | 17.8% |
In million tonnes
NLMK's Danish subsidiary DanSteel A/S
| | Q4'08 | Q3'08 | Change | 2008 | 2007 | Change |
| Heavy plates | 0.110 | 0.104 | 5.6% | 0.504 | 0.496 | 1.6% |
In million tonnes
VIZ-Stal
| | Q4'08 | Q3'08 | Change | 2008 | 2007 | Change |
| Transformer steel | 0.042 | 0.048 | ‐12.4% | 0.183 | 0.188 | ‐2.5% |
| Dynamo steel | 0.000 | 0.001 | ‐43.5% | 0.008 | 0.019 | ‐59.5% |
In million tonnes
Stoilensky GOK
| | Q4'08 | Q3'08 | Change | 2008 | 2007 | Change |
| Iron ore concentrate | 1.833 | 2.929 | ‐37.4% | 10.592 | 11.577 | ‐8.5% |
| Sinter ore | 0.147 | 0.352 | ‐58.2% | 1.299 | 1.764 | ‐26.4% |
In million tonnes
Altai-koks
| | Q4'08 | Q3'08 | Change | 2008 | 2007 | Change |
| Coke (dry) | 0.551 | 0.872 | ‐36.8% | 3.249 | 3.506 | ‐7.3% |
In million tonnes
Maxi Group
| | Q4'08 | Q3'08 | Change | 2008 | 2007 | Change |
| Billet | 0.074 | 0.171 | ‐56.5% | 0.539 | 0.842 | ‐36.0% |
| Rebar | 0.194 | 0.247 | ‐21.3% | 0.972 | 0.645 | 50.8% |
| Wire rod | 0.045 | 0.059 | ‐22.7% | 0.203 | 0.032 | 542.8% |
| Metalware | 0.033 | 0.035 | ‐5.5% | 0.146 | 0.269 | ‐45.8% |
| Scrap 4 | 0.495 | 0.851 | ‐41.8% | 2.673 | 2.103 | 27.1% |
In million tonnes
1. NLMK sales were consistent with overall 2008 market trends. Demand growth from January to July in the export market and from March to April in the domestic market has led to a boost in sales volumes constrained only by production capacities. Prices for all types of products soared to record levels in the export and domestic markets by mid‐year 2008.
2. In Q4 2008 the accelerating drop in demand for steel‐intensive products and, consequently, for steel, forced producers to drastically cut prices and production volumes across the product mix. The sharpest decline in demand, sales prices and volumes was recorded in low value added products. In 2008 the Lipetsk production site cut production volumes to 8.5 million tonnes compared to the planned 9.4 million tonnes. At Maxi‐Group, steel production volumes in 2008 reached 1.9 million tonnes, 12% lower than the planned 2.2 million tonnes. NLMK Group’s total steel production reached 10.4 million tonnes.
3. Lower FY2008 production volumes for most of the product range were primarily attributable to a decrease in orders in Q3 and Q4 2008 followed by a slump in Q4 2008 sales. Sales of pre-painted, transformer steel and plate bucked this trend which is mainly attributable to the long‐term contract sales.
4. NLMK’s Q4 2008 sales volumes decreased QoQ across the product range. The decline in slab sales was partially mitigated by increased supplies to Duferco JV facilities. Prices decreased mostly for pig iron, slabs and hot‐rolled products.
5. The decline in demand for VIZ-Stal products in December 2008 led to lower transformer steel sales volumes in Q4 2008 and FY2008. Prices for VIZ-Stal’s electrical steel in Q4 2008 were lower QoQ, primarily due to higher USD/RUR exchange rate.
6. In 2008 iron ore concentrate and sinter ore sales volumes in Stoilensky GOK were dependent on NLMK’s iron ore requirements. Higher Q4 2008 USD/RUR exchange rates and lower sinter ore export sales volumes reduced average prices for iron ore concentrate and sinter ore.
7. The accelerating deterioration of the pricing environment and falling demand witnessed in Q4 2008 translated into a significant decrease in prices and sales volumes and, as a result, output of coke to chemical products at Altai‐Koks, leading to a decrease in Altai‐Koks 2008 coke sales volumes on a YoY basis.
8. The growth in wire rod and rebar production and sales volumes in the first nine months of 2008 led to a decrease in billet and metalware sales volumes on a YoY basis. The QoQ decline in sales volumes and prices for Maxi Group’s products was mainly due to weaker demand for steel products in Q4 2008.
