Severstal announces its operational results for Q2 & H1 of 2020. Hot metal output decreased 3% QoQ to 2.33 million tonnes in Q2 of 2020 due to maintenance works at BF 1, 4 and 5. Crude steel production decreased 2% QoQ to 2.81 million tonnes in Q2 of 2020 as a result of the decline in hot metal output. Consolidated steel product sales decreased 7% QoQ to 2.55 million tonnes in Q2 of 2020 reflecting lower crude steel production and a higher portion of export sales, which have a longer realisation period. In addition the Company increased stock of finished goods at the end of the quarter. The share of steel export shipments remained high at 44% as compared to 45% in Q1 of 2020 in response to a slowdown in domestic demand caused by lockdown measures implemented in Russia. The share of high value-added products within the sales portfolio amounted to 42% in Q1 of 2020 reflecting a higher level of colour coated shipments and lower sales of semi-finished products and hot rolled coil. Coking coal concentrate sales volumes from Vorkutaugol increased 34% QoQ to 1.28 million tonnes in Q2 2020 as a result of planned production growth. Iron ore pellet sales decreased 15% QoQ to 2.53 million tonnes. In response to weaker pricing dynamics for pellets in Q2 2020, Karelsky Okatysh reallocated a portion of its volumes into iron ore concentrate, achieving a higher rate of end-to-end efficiency of internal consumption at CherMK. Iron ore concentrate sales volumes increased 30% QoQ to 1.90 million tonnes (driven by production growth at Karelsky Okatysh, and a recovery in production levels following a planned decline in Q1 at Olcon.

Hot metal output increased 2% YoY in H1 of 2020 to 4.74 million tonnes driven by reduced maintenance downtime and higher energy efficiency rates. Crude steel production decreased to 5.66 million tonnes as compared to 6.10 million tonnes in H1 of 2019 following the sale of the Balakovo mini-mill in 2019. Iron ore concentrate sales volumes increased 24% YoY to 3.37 million tonnes primarily reflecting the ramp-up of the Yakovlevskiy mine and higher production levels at Karelsky Okatysh. Coking coal concentrate sales volumes from Vorkutaugol increased 12% YoY driven by planned production growth. The share of HVA products in the sales mix declined 2 ppts to 43% in H1 2020 reflecting higher sales volumes of semi-finished products and hot rolled coil. The average steel selling prices for H1 2020 declined from 9% to 23% across the product range reflecting global benchmark dynamics.