MMK to cut production

MMK to cut production

Russian steel producer Magnitogorsk Iron and Steel Works (MMK) reportedly considers shutting three of its eight furnaces due to shortage of certain raw materials as a result of lack of suppliers. MMK, which consumes 6 million tons of iron ore pellets annually, meets 70% of its iron ore pellet requirement from Kazakhstan's largest iron ore producer Sokolov-Sarbai GOK and the remaining 30% from Russia's Mikhailovsky GOK. The Russian supplier on Friday announced that it would halt its deliveries to MMK since Russian steel producer rejected to sign a new contract on the back of higher prices. Sokolov-Sarbai had already stopped its deliveries on May 9, 2005. MMK signed iron ore deals with Severstal and Ukraine's Poltova GOK however supplies from these two companies will not be sufficient to meet MMK's requirement.