October 11, 2019

PAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world’s leading
vertically integrated steel and steel-related mining companies, today announces
its operational results for Q3 2019.

Q3 2019 GROUP HIGHLIGHTS

  • Hot metal output increased 7% q/q in Q3 2019 to 2.46 mln tonnes (Q2 2019:
    2.30 mln tonnes) following short-term maintenance works at BF#1, BF#4 and BF#5
    in the previous quarter. Crude steel production declined 1% to 3.03 mln tonnes
    (Q2 2019: 3.06 mln tonnes) mainly reflecting a decline in EAF steel output
    following the sale of Balakovo mini-mill in July 2019.
  • Consolidated steel product sales remained flat q/q at 2.83 mln tonnes in Q3
    2019 (Q2 2019: 2.83 mln tonnes). The share of domestic sales remained at
    historically high levels of 67% due to their continued attractiveness (Q2 2019:
    70%).
  • The share of high value-added (HVA) products within the sales portfolio
    amounted to 45% (Q2 2019: 46%), reflecting a decline in sales of galvanised,
    colour-coated and cold-rolled products due to short-term maintenance works at
    one of the pickling lines. This was offset by higher sales volumes of thick
    plate and lower sales of long products.
  • Coking coal concentrate sales volumes from Vorkutaugol surged 41% q/q in
    line with the 42% increase q/q in production of run-of-mine coal.
  • Iron ore pellet sales declined 15% to 2.46 mln tonnes (Q2 2019: 2.90 mln
    tonnes) reflecting higher production of iron ore concentrate at Karelsky
    Okatysh.
  • Iron ore concentrate sales volumes increased 35% to 1.93 mln tonnes (Q2
    2019: 1.43 mln tonnes) driven by production volumes growth at Karelsky
    Okatysh.

9M 2019 GROUP HIGHLIGHTS

  • Hot metal output increased 3% y/y to 7.13 mln tonnes in 9M 2019 (9M 2018:
    6.91 mln tonnes) driven by improved maintenance works efficiency and higher
    quality of raw materials. Crude steel production remained almost flat at 9.13
    mln tonnes (9M 2018: 9.10 mln tonnes), predominantly reflecting higher
    aggregate productivity levels, which were offset by lower EAF production in Q3
    following the sale of Balakovo mini-mill.
  • Coking coal concentrate sales volumes from Vorkutaugol increased 43% y/y,
    driven by growth in coal production. Iron ore concentrate sales volumes
    increased 14% y/y to 4.66 mln tonnes (9M 2018: 4.08 mln tonnes) predominantly
    reflecting production volumes growth at Karelsky Okatysh.
  • The share of HVA products remained high at 45% in 9M 2019, primarily
    reflecting higher sales of galvanised and colour-coated products following the
    launch of new product lines, which reached their full utilisation rates in Q1
    2019.

SUMMARY OF KEY PRODUCTION, SALES VOLUMES

SEVERSTAL’S CONSOLIDATED SALES (NET OF INTERCOMPANY
SALES)

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