Evraz: COVID behind lower operational results at North American assets

Evraz company name on phone screen
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Crude steel production at Evraz’s North American assets dropped 15.1% year over year in 2020. The drop was due mainly to the COVID-19 pandemic’s impact on the global economy, the Russian group noted.

Evraz output in North America drops

Production for the 12 months totaled 1.58 million metric tons from slightly over 1.86 million tons over the same time in 2019, Evraz stated Jan. 29.
“Turbulence in the oil and gas markets led to lower demand, resulting in decrease of production volumes at Evraz North America,” the group noted.
Increased demand for flat-rolled and construction products drove up Q4 crude production by 27%. Production rose to 423,000 metric tons from 334,000 metric tons in Q3 2020.
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Evraz in North America

Evraz North America has six plants throughout the United States and Canada. The wholly owned subsidiary can produce up to 2.3 million metric tons per year of crude steel via electric arc furnaces at Pueblo and Regina in Colorado and Saskatchewan, respectively.

Besides having hot ends, the Pueblo plant can roll long products that include rail, wire rod and rebar in coils, along with seamless pipes. Meanwhile, the Regina plant produces line pipe from the plate products it rolls.
The Canadian site, including Camrose, Calgary and Red Deer plants in Canada, can also produce casings and tubings for oil country tubular goods (OCTG) as well as straight- and spiral-weld line pipes.
Furthermore, Evraz North America’s Portland plant also produces line pipe from the plate as well as hot coil it rolls on site.
Semi-finished and finished production fell 25% on the year to total 1.67 million metric tons from 2.21 million metric tons, also due to fulfillment of a contract with a key customer, the group noted.

OCTG sales plunge

Tubular products saw the largest decline of those products. Sales volumes of tubular products fell 37.9% to 494,000 metric tons from 795,000 metric tons.
Due to the decline, Evraz North America idled its OCTG mills.
“At the same time, line pipe production continued to be stable during the period as both large- and small-diameter mills were producing to current orders,” Evraz added.
Average selling prices for tubular products in 2020 totaled $1,349 per metric ton EXW, marginally higher than the $1,340 per metric ton reported for the previous year. Meanwhile, flat products prices fell by 17.8% from $911 per metric ton down to $754 per metric ton.
“In Q1 2021, production and sales volumes for construction, flat-rolled and rail products are expected to continue to improve in line with market recovery. For tubular products, the uncertainty in energy markets remains a significant factor impacting North American customers, however, the OCTG market has started demonstrating early signs of returning demand,” Evraz said.
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