EVRAZ : Q4 and FY 2017 PRODUCTION REPORT

Date of publication: 18.01.2018

EVRAZ plc (LSE: EVR; 'EVRAZ' or the 'Group') today released its operational results for the fourth quarter and full year of 2017.

Q4 2017 vs Q3 2017 OPERATIONAL HIGHLIGHTS:

· In Q4 2017, EVRAZ' consolidated crude steel output remained stable QoQ at 3.5 million tonnes.

· Consolidated output of steel products, net of re-rolled volumes, rose by 5.7% QoQ to 3.3 million tonnes, mainly due to higher steel product output at EVRAZ ZSMK's mill amid planned capital repairs of blast furnace no. 2 in June and July.

· Higher volumes of semi-finished products led to increased steel product output at the Russian steel mills, net of re-rolled volumes. Meanwhile, output of construction products fell, reflecting the seasonal slowdown in demand for construction products in Russia and the impact of changes to the sales mix.

· Railway product output grew, driven by the completion of repairs at EVRAZ ZSMK's rail mill in Q3 2017, which had impacted production volumes in that period.

· In North America, output of crude steel and steel products were almost unchanged from Q3 2017.

· In Q4 2017, output of raw coking coal decreased, primarily due to scheduled longwall repositioning at the Alardinskaya and Uskovskaya mines. Output of coking coal concentrate climbed by 7.8% QoQ (inventories were used in production) due to greater market demand, better washing plants performance and debottlenecking of logistics capacities.

FY 2017 vs FY 2016 HIGHLIGHTS:

· In 2017, consolidated crude steel production and steel product output, net of re-rolled volumes, increased by 3.8% and 3.2%, respectively. This was mainly attributable to improved market demand in North America and higher crude steel production at EVRAZ ZSMK following the completion of planned capital repairs at its blast furnaces in 2016.

· Output of steel products, net of re-rolled volumes, at the Russian steel mills reflected higher volumes of semi-finished products, while output of construction products fell in line with the change in the sales mix.

· Railway product output at EVRAZ NTMK rose amid improved market conditions and higher production of railway products in North America after Class I railroads finished destocking.

· Greater production of flat-rolled products was triggered by higher production volumes at EVRAZ Palini e Bertoli. It was accompanied by higher output in North America due to improved demand, primarily from the wind tower and energy segments.

· In North America, output of tubular products (oil country tubular goods, or OCTG, and small-diameter line pipe) improved thanks to the strong market recovery.

· Production of coking coal concentrate grew by 6.2% YoY. This was driven by higher annual output at the Raspadskaya mines and Mezhegeyugol in 2017.

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