NLMK.L Regulatory News (NLMK)

15 Apr 2008 13:53

OJSC Novolipetsk Steel15 April 2008 15 April 2008 Novolipetsk Steel (NLMK) Q1 2008 Trading Update Novolipetsk Steel (LSE: NLMK) today announces the following regular tradingupdate for Q1 2008. 1. Production and Sales* NLMK Q1 2008 production volumes: million, t Q1 Q4 Q1 Q1 2008/ Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007 Pig iron 2.434 2.376 2.338 2.4% 4.1%Crude steel 2.386 2.282 2.341 4.5% 1.9%Slabs 0.969 0.887 1.054 9.3% -8.0%Hot-rolled steel** 0.541 0.522 0.453 3.6% 19.4%Cold-rolled steel 0.427 0.355 0.409 20.2% 4.3%Hot dip galvanized steel 0.112 0.128 0.090 -12.5% 23.5%Pre-painted steel 0.091 0.066 0.086 38.3% 5.5%Dynamo steel 0.082 0.089 0.094 -8.0% -12.2%Transformer steel 0.041 0.038 0.035 7.5% 17.3% NLMK Q1 2008 sales volumes: million, t Q1 Q4 Q1 Q1 2008/ Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007 Pig iron 0.266 0.319 0.243 -16.5% 9.7%Slabs 0.738 0.942 1.022 -21.6% -27.7%Hot-rolled steel 0.454 0.502 0.435 -9.7% 4.2%Cold-rolled steel 0.374 0.355 0.414 5.6% -9.5%Hot dip galvanized steel 0.096 0.123 0.076 -21.5% 27.1%Pre-painted steel 0.080 0.064 0.076 23.7% 4.2%Dynamo steel 0.075 0.089 0.096 -15.1% -21.7%Transformer steel 0.036 0.042 0.033 -15.2% 7.6% Dansteel A/S Q1 2008 sales volumes: million,t Q1 Q4 Q1 Q1 2008 / Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007 Heavy plates 0.136 0.116 0.143 17.5% -4.4% VIZ-Stal Q1 2008 sales volumes: million, t Q1 Q4 Q1 Q1 2008 / Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007 Transformer steel 0.047 0.047 0.045 -1.6% 3.0%Dynamo steel 0.004 0.005 0.004 -18.3% 11.3% Stoilensky GOK Q1 2008 sales volumes: million, t Q1 Q4 Q1 Q1 2008 / Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007 Iron ore concentrate 3.000 3.100 2.932 -3.2% 2.3%Sinter ore 0.419 0.441 0.435 -5.1% -3.7% Altai-koks Q1 2008 sales volumes: million, t Q1 Q4 Q1 Q1 2008 / Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007 Coke (dry) 0.865 0.823 0.832 5.0% 4.0% Maxi-Group Q1 2008 sales volumes: million, t Q1 Q4 Q1 Q1 2008 / Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007 Billet 0.121 0.092 0.301 31.0% -59.9%Rebar 0.313 0.204 0.111 53.4% 182.0%Wire rod 0.039 0.041 0.081 -4.9% -51.9%Metalware 0.026 0.052 0.088 -49.1% -70.2%Scrap*** 0.520 0.349 0.553 49.0% -6.0% * Q1 2008 production and sales data is indicative and subject to amendments ** Including HR coils supplied to other production facilities ** *Including sales in Maxi-Group 2. Realized prices Realized prices are calculated by dividing sales revenue by sales volume. Suchcalculations do not differentiate between particular product types and gradeswithin a product sub-category. Realized prices are not indicative of actualcontract prices and can only serve as an approximation. All information on Q12008 prices is preliminary and subject to change. The table below shows NLMK Q1 2008 average prices: USD per tonne, (FCA)* Q1 Q4 Q1 Q1 2008 / Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007Pig iron 380.0 318.7 259.5 19.3% 46.5%Slabs 501.2 476.4 372.1 5.2% 34.7%Hot-rolled steel 609.6 576.0 524.0 5.8% 16.3%Cold-rolled steel 679.6 655.0 582.7 3.8% 16.6%Hot dip galvanized steel 955.0 923.4 955.7 3.4% -0.1%Pre-painted steel 1 245.1 1 236.1 1 136.5 0.7% 9.6%Dynamo steel 814.6 783.6 715.3 4.0% 13.9%Transformer steel 3 680.4 3 525.1 3 330.0 4.4% 10.5% Q1 2008 average prices for DanSteel A/S products are as follows: Euro per tonne, (FCA)* Q1 Q4 Q1 Q1 2008 / Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007Heavy plates • 759.5 • 767.2 • 745.4 -1.0% 1.9% VIZ-Stal Q1 2008 average prices: USD per tonne, (FCA)* Q1 Q4 Q1 Q1 2008 / Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007Transformer steel 3 836.1 3 730.5 3 326.4 2.8% 15.3%Dynamo steel 1 016.3 985.7 945.8 3.1% 7.5% Q1 2008 average prices for Stoilensky GOK products: USD per tonne, (FCA)* Q1 Q4 Q1 Q1 2008 / Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007Iron ore concentrate 76.5 68.1 64.3 12.3% 19.1%Sinter ore 35.9 27.1 23.6 32.7% 52.3% Altai-koks Q1 2008 average product prices: USD per tonne, (FCA)* Q1 Q4 Q1 Q1 2008 / Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007Coke (dry) 252.8 245.3 123.8 3.1% 104.3% Q1 average prices for Maxi-Group products: USD per tonne, (FCA)* Q1 Q4 Q1 Q1 2008 / Q1 2008 / 2008 2007 2007 Q4 2007 Q1 2007Billet 508.7 472.8 397.0 7.6% 28.1%Rebar 604.3 516.8 556.6 16.9% 8.6%Wire rod 577.9 555.5 524.4 4.0% 10.2%Metalware 855.1 682.2 585.4 25.3% 46.1%Scrap 319.9 231.4 216.5 38.3% 47.8% * Excluding freight charge 3. Management Board comments The decrease in sales of NLMK products in Q1 2008 on quarter-on-quarter basis isprimarily attributable to seasonal weakening of demand in the domestic marketbecause of the January New Year holidays as well as switch to export deliverycontracts based on FOB terms starting January 2008 that led to the delay oftransfer of property rights. Strong pricing environment in the domestic and,especially, in the global markets during Q1 2008 mainly caused by increasedprices for raw materials was a key driver for price growth for NLMK's steelproducts. In Q1 2008, DanSteel A/S increased hot-rolled thick plate sales on aquarter-on-quarter basis due to lower sales in the previous quarter because ofthe December Christmas holidays. Transformer steel production volumes at VIZ-Stal in Q1 2007 remained at almostthe same level as the previous quarter. A minor decrease in sales volumes wascaused by lower demand for 0.5mm thick transformer steel. Favorable marketconditions were a key driver behind the increase in VIZ-Stal's steel productprices. The growth in Maxi-Group's main product output in Q1 2008 on aquarter-on-quarter basis is mainly attributable to an increase in workingcapital after the company was acquired by Novolipetsk Steel in December 2007.The increase in Maxi-Group's steel product prices reflects a global trend forlong product price growth. Stoilensky GOK's iron ore concentrate and sinter ore sales were realized inaccordance with the production requirements of the main production site inLipetsk. An increase in prices of iron ore concentrate and sinter ore producedat Stoilensky GOK in Q1 2008 compared to the previous periods is attributable tothe favorable conditions in the global iron ore market. A tight supply of coking coal during the second half of 2007 resulted in growingaverage prices of coking coal concentrate and, as a consequence, Altai-koks cokeprices. The growth in coke sales is mainly attributable to increased demand incore markets, such as Russia and the CIS. 4. Outlook We note that increases in the prices of basic raw materials drove steel pricesin Q1 2008. The prices continue growing in Q2 2008. We expect a mid-year steelprice flattening. This information is provided by RNS The company news service from the London Stock Exchange