MOSCOW, July 24. /TASS/. Severstal boosted steel output by 6% in 1H 2023 year-on-year to 5.65 mln tons, while the production of pig iron added 6% to 5.64 mln tons, the steel and mining company reported on Monday. Meanwhile, steel output increased by 9%, while pig iron production gained 7% in Q2 quarter-on-quarter.

Sales amounted to 5.47 mln tons in 1H, up by 9% year-on-year. Q2 sales lost 2% compared with Q1 2023.

Sales of semi-finished products decreased by 10% in 1H year-on-year, while sales of commercial steel (hot-rolled and long steel) rose by 19% to 2.38 mln tons amid increased demand for hot-rolled steel as the Russian economy adjusted to sanctions pressure, the company said. Sales of high-value added products increased by 7% year-on-year to 2.5 mln tons.

"Global markets faced a difficult situation in Q2 2023, as prices for steel and raw materials declined beginning in March amid low demand for steel in China. China’s steel output grew for most of Q1 2023. At the same time, the increase in demand for steel from end consumers was not as high as expected at the beginning of the year," Chief Executive Officer of Severstal Management Alexander Shevelev was quoted as saying.

With production growth alongside stagnation in steel consumption in China, Beijing increased its exports of steel products considerably, for example, steel exports from China in May reached their highest level since 2016 (98 mln tons on an annualized basis), which put downward pressure on steel prices in many regions around the world, CEO noted. "Prices stabilized only in June, reaching $545/t FOB China. At the same time, we are not seeing this kind of price volatility in the Russian market," he said.

"Our team continues to increase operational efficiency. We have a stable financial position thanks to an improvement in the structure of our sales portfolio, sales growth and price stability in our key market of Russia. We also continue to implement investment projects," Shevelev pointed out.

Severstal is a vertically integrated steel and mining company and one of Russia’s largest steel producers. The Cherepovets Steel Mill is the company’s key asset. Its production capacity roughly totals 12 mln metric tons of steel per year.

Chairman of the board of directors Alexey Mordashov who holds 77.03% of shares, is the main shareholder of Severstal. The remaining stock is in free float.