Sales volumes review

External steel product sales volumes at EVRAZ’ Steel segment fell by 3.6% in 2016. The reduction explained mainly by sales volumes of construction products decrease by 9.8% year-on-year amid continued weak demand on the Russian market. Sales volumes of semi-finished steel products to third parties remained mostly unchanged in 2016. Railway products sales volumes rose 12.6% due to an uptick in purchases by Russian Railways and increased export shipments.

EVRAZ sales volumes of key finished products in Russia decreased in 2016. Russian rebar sales fell by 18% year-on-year, and angle and channel sales were down by 7% due to the ongoing construction industry slowdown. However, beam sales in Russia increased by 4% year-on-year thanks to portfolio development. Wheel sales in Russia rose by 3% due to increased new railcar production. Meanwhile, despite a competitor ramping up a mill in 2016, Russian rail sales climbed by 6% on the back of greater demand from Russian Railways, which bought 7% more rails from EVRAZ than in 2015. Sales of grinding balls increased by 3% due to stable demand.

Geographic breakdown of external steel product sales, kt
2016 2015 Change, %
Russia 4,998 5,413 (7.7)
Asia 3,285 3,020 8.8
Europe 1,302 1,617 (19.5)
CIS 883 987 (10.5)
Africa, America and rest of the world 1,323 1,190 11.2
Total 11,792 12,227 (3.6)
Steel segment sales volumes, kt
2016 2015 Change, %
Steel products, external sales 11,792 12,227 (3.6)
Semi-finished products 5,601 5,600 0.0
Construction products 4,135 4,583 (9.8)
Railway products 1,134 1,007 12.6
Flat-rolled products 351 383 (8.4)
Other steel products 571 654 (12.7)
Steel products, inter-segment sales 521 560 (7.0)
Total steel products 12,313 12,787 (3.7)
Vanadium products (tonnes of pure vanadium) 16,655 18,074 (7.9)
Vanadium in slag 5,261 4,082 28.9
Vanadium in alloys and chemicals 11,394 13,992 (18.6)
Iron ore products 4,218 4,421 (4.6)
Pellets 1,672 1,388 20.5
Iron ore concentrate 36 14 n/a
Other iron ore products 2,510 3,019 (16.9)

Despite slower domestic shipments during the year, the Group sustained its strong positions in key high-value-added product segments. Its share of the domestic beam market held stable at 63%.

The market shares for rebars, structural shapes (channels and angles) and wheels dipped slightly by a respective 14%, 43% and 27%. The grinding ball market share expanded to 70%. EVRAZ remained the leader in rail production with a 72% market share in 2016, albeit down from 97% in 2015 due to the entrance of a new player.

Evraz Caspian Steel rebar sales decreased by 30% to 180 thousand tonnes in 2016 due to low demand amid Kazakhstan’s economic crisis.

Sales at EVRAZ DMZ increased by 5% to 975 thousand tonnes due to the improved local market situation and stable export sales volumes.

The Group’s vanadium product sales volumes decreased by 7.5%, from 18,074 thousand tonnes of pure vanadium in 2015 to 16.722 thousand tonnes in 2016.

EVRAZ sold 1.7 million tonnes of iron ore pellets to third parties in the year, up by 20.5% from 2015, due to an increased demand in Russian market. Other external iron ore product volumes dropped by 15.9%.

EVRAZ market share in Russia by key products, %