EVRAZ, the steel, mining and vanadium group, saw production decrease in the third quarter while prices were hit by tough conditions in global steel markets.

Consolidated crude steel production in the three months to the end of September fell by 3% compared with the preceding second quarter and the same quarter of last year due to lower production at its Vitkovice Steel operations in the Czech Republic and Highveld in South Africa.

Output of crude steel at Vitkovice fell by 55% year-on-year and 59% quarter-on-quarter.

This month (start of the fourth quarter), the company had to temporarily shut down steel production at this particular site as a result of low demand and to optimise the raw materials inventory.

Meanwhile, production at Highveld also fell sharply in the third quarter as a result of a four-week industrial action.

Despite the reduced output, total production volumes of steel products increased by 2% mainly due to a higher use of purchased third parties slabs.

The firm said that prices for most steel product groups fell during the period on the back of ongoing uncertainty in global steel markets and falling prices of iron ore and coking coal. In EVRAZ's semi-finished and construction products, the firm's two largest product groups, average selling prices were down 13% and flat, respectively.

"In Q4 2012 we expect to be subject to usual seasonal trends, including slowdown in the construction activity in Russia," it added.

For their part, analysts at Credit Suisse are commenting the following this morning: "overall weak set of numbers for Q3, and as we see the construction market slowing-down in Q4, we expect weak operational performance to transform into weak financial results for the second half. We expect earnings before interest, taxes, depreciation and amortisation (EBITDA) in the second half to decrease 25% on the first, to US$850m, with further deterioration in 2013 (estimate).

Related share prices
Evraz (EVR) share price