Severstal’s third-quarter steel product sales rose by 8 percent year on year to 2.86 million tonnes due to stronger domestic demand, Russia’s fourth-largest steel producer reported on Tuesday.
Russian steelmakers are recovering from two years of falling sales as the economy improves from a slowdown triggered by weak oil prices and Western sanctions imposed over Moscow’s role in the Ukraine crisis.
Increased demand and the construction season helped sales of accumulated stocks of high value-added (HVA) products in July-September, Severstal said in a statement.
BCS Investment Bank said in a note that Severstal’s trading update indicated that its third-quarter financial results should be positive compared to the second quarter.
Controlled by billionaire Alexei Mordashov, Severstal sees Russian steel demand increasing by up to 5 percent this year spurred by growth in the car and oil and gas sectors, it told Reuters in September. It also expected its 2017 core earnings to beat market expectations.
Quarter on quarter, Severstal’s steel product sales rose 4 percent as summer rains in central Russia delayed the start of the construction season and partially shifted demand from the second quarter.
The share of domestic sales volumes within the sales mix increased to 65 percent from 60 percent.
Severstal’s steel production totalled 2.94 million tonnes in the third quarter, down 1.4 percent year on year due to planned maintenance. It was up 4 percent quarter on quarter.
Severstal shares were up 0.2 percent at 897 roubles at 0807 GMT while Moscow’s benchmark MICEX index was down 0.3 percent.