Domestic sales account for 65 percent of MMK’s overall sales in H1

Thursday, 05 August 2010 14:28:59 (GMT+2)

The Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced that in the first half of the current year its steel product shipments amounted to 5.076 million mt, showing an increase of 32.3 percent year on year, with 89 percent of this growth being secured by the domestic market, including the CIS, which is considered as a priority and as strategically important for the company. In H1 this year, MMK was able to increase the share of domestic sales in its overall sales to 65 percent, up from 57 percent in H1 2009.

Accordingly, MMK's major sales regions in the domestic market, including CIS countries, remain the Ural region (36 percent) and the Volga region (30 percent), which together account for two thirds of all the company's domestic sales, as well as the Central region (11 percent),and Siberia and Russia's Far East region (seven percent). About 10 percent of total sales are accounted for by Belarus and other CIS countries.

The main consumers of MMK's steel products in the domestic market are the pipe companies, the sales to which accounted for 33 percent of MMK's total sales in Russia in H1 this year. Thus, in January-June 2010, MMK supplied pipemakers with 1.1 million mt of steel products, which is equal to nearly 70 percent of MMK's total deliveries to this sector in 2009. The increased supply was possible due to the commissioning of MMK's new plate rolling mill 5000 in July last year.

Another major consumer of MMK's steel products in the domestic market is the machine-building sector, including automakers, the deliveries to which accounted for 22 percent of MMK's total H1 2010 sales in Russia. Substantial support for demand from automakers has come from the government program for recycling old cars in exchange for new ones. Among other large consumers of MMK's products are hardware and recycling companies, and the construction industry.

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