South African steel producer Evraz Highveld Steel and Vanadium on Friday reported sweeping quarter-on-quarter production decreases for the third quarter ended September 30, after contending with limited access to electricity and maintenance-induced delays over the three months.

The company said in a results statement that, in July and August, iron-making furnace electricity input was constrained to offset the impact of peak electricity tariffs implemented for 25 hours a week.

This resulted in lower liquid iron production, which, in turn, drove an 8% slump in hot steel output, from 158 435 t in the second quarter, to 145 123 t in the third quarter.

Vanadium slag production was also affected to the downside, decreasing by a noteworthy 23% from 1.92-million kilograms in the second quarter to 1.44-million kilograms for the most recent quarter.

Meanwhile, the rolling of structural and flat products continued without interruption by reducing the inventory of cast steel, while, in August, the slab caster was out of operation for an extended period to allow for major maintenance to be undertaken.

“The outage overran the planned schedule, resulting in below-plan production of liquid iron, cast slab, rolled flat products and vanadium slag during September,” noted the steel producer.

Production of continuously cast steel blocks declined by 9% quarter-on-quarter to 144 147 t, while the output of continuously cast plates dropped by 14% to 41 779 t.

In contrast, the production of continuously cast steel sections increased by 17% from 47 208 t in the second quarter of the year to 55 233 t in the third quarter.

Meanwhile, Evraz reported that third-quarter ore production at the mine was impacted by equipment availability problems and the introduction of quality improvements.

Consequently, fines ore dropped by 18% quarter-on-quarter, from 188 463 t to 153 650 t.

In addition, a decrease in the availability of slag, which arose as a result of the company's contractual obligation to supply slag to Hochvanadium, drove a "biting" 91% decrease in modified vanadium oxide (MVO), which slumped from 284 345 kg in the second quarter to 25 938 kg in the third quarter.

Similarly, Nitrovan production decreased by 72% to 37 449 kg.

PRICE DIP

Adding to the steel producer’s setbacks, reduced local market demand and an increase towards export markets resulted in a lower weighted average steel price for the third quarter, with the average weighted LMB pricing reducing by 13% quarter-on-quarter.

The company achieved an average steel selling price of $708/t for the third quarter, representing a 6% drop from the $752/t achieved in the previous three months.

The price of vanadium slag decreased by a more considerable 20% over the period, declining from $10/kg to $8/kg, while Evraz received $23/t for fines ore – a 28% drop from the second quarter’s $32/t.

Similarly, the achieved selling price of MVO decreased by 6%, from $20/kg to $19/kg, while the price of Nitrovan declined from $29/kg in the second quarter to $24/kg in the three months under review.

Evraz’s third-quarter results come a month after CEO Mike Garcia played down reports that the steel company was facing volatile market conditions that had threatened the company’s ability to continue as a going concern.

Garcia told Engineering News Online at the time that it had only notified its shareholders of risks such as labour instability, the fragile health of the steel market, production stability and access to credit lines, because it was a publically traded company.

“This does not mean that the company expects any of these risks to materialise,” he said.