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Lower prices lead Severstal to draw red ink in 2d quarter

Keywords: Tags  Severstal, quarterly earnings, steel, iron ore, coking coal, steel prices, Nadia Popova

MOSCOW — Lower steel, iron ore and coking coal prices took a toll on OAO Severstal during the second quarter, according to the Russian steelmaker’s financial results issued Aug. 29.

Moscow-based Severstal posted a not loss of $44 million for the three months ended June 30 in contrast to year-earlier net income of $155 million on revenue that slipped 8.2 percent to $3.41 billion from $3.72 billion. The company had posted net income of $44 million in the first quarter.

The steelmaker’s earnings before interest, tax, depreciation and amortization (Ebitda) stood at $479 million during the quarter, down 27.9 percent from $664 million in the same period last year but up 11.4 percent from $430 million in the first quarter.

Severstal expects steel demand in Russia and the United States to remain "strong with moderate upward pricing movements" for the rest of the third quarter.

However, the market will likely remain "challenging" in the medium to long term.

A version of this article was first published in AMM sister publication Steel First.

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