Eurasian Natural Resources Corporation (ENRC), the holding company of a leading diversified natural resources group based in Kazakhstan, said Wednesday that it saw production cutbacks in the last quarter and for 2009 it saw no immediate prospect of an improvement, at least for the first half of the year. It anticipated reduced production volumes and pricing pressures to continue into 2009. This remains the Group's view based on current market conditions.
In Q1 2009 the Ferroalloys Division is continuing the process of inventory destocking. However, it currently expects ferrochrome production for H1 2009 overall to be in line with previous guidance.
In the fourth quarter ended December 31, 2008, the Ferroalloys and Iron Ore Divisions significantly reduced production volumes as the Group cut back in response to market conditions and reduced demand that affected the industry, the company said.
Production volumes for the Alumina and Aluminium Division increased compared to the fourth quarter of 2007. Ore grades remained broadly consistent with the corresponding period.
Ferroalloys Division (excluding Serov). Production volumes decreased broadly in line with the previously announced cutback in ferrochrome production for the ongoing business of the Division of (35%) for Q4 2008: (29.6%) for saleable chrome ore; o(33.3%) for manganese concentrate; and (33.9%) for total ferroalloys, with low- and medium-carbon ferrochrome production remaining broadly steady.
Serov added saleable chrome ore production of 23 thousand tonnes and total ferroalloys production of 39 thousand tonnes. Production was cut back in Serov in Q4 2008. Tuoli added significant capacity, however, output was suspended in Q4 2008.
The group said that production volumes in the Iron Ore Division decreased broadly in line with the previously announced cutback for the ongoing businesses of the Division of (50%) of primary concentrate for Q4 2008: (42.0%) for iron ore extraction; (42.7%) for primary concentrate; and (41.6%) for saleable ore. There was a change in the saleable mix with an increased proportion of concentrate. Pellet production declined (45.3%) whilst saleable concentrate production decreased (37.6%).
Production volumes in the Alumina and Aluminium Division increased: 2.3% for saleable alumina; and 181.8% for aluminium. Bauxite extraction decreased slightly, in line with the destocking of material at the mines. The growth in alumina resulted from the planned expansion in production to supply the new aluminium smelter which commenced production at the end of 2007. The Division produced 31 thousand tonnes of aluminium, in line with the Phase 1 run rate capacity of 125 thousand tonnes per annum.
The company announced that production volumes in the Energy Division decreased (2.5%) for coal extracted and (12.4%) for electricity generated, principally due to reduced internal demand, however, external sales remained broadly steady.
In the Logistics Division, tonnage of goods transported by railway decreased (23.6%) as a result of reduced production volumes in the main operating Divisions, the company said.
Dr Johannes Sittard, Chief Executive Officer, said, "The operating environment for the Ferroalloys and Iron Ore Divisions deteriorated in Q4 2008. We responded very quickly to the change in the economic environment with the announcement of production cutbacks. Currently we feel comfortable with the sufficiency of the cutbacks and with our outlook, at least for the first-half of 2009. We do, however, continue to monitor the situation closely."
No comments:
Post a Comment