Considering the encouraging signs of revival seen in the world steel market, the Russian steel producer Magnitogorsk Iron and Steel Works (MMK) plans to increase its July output to 835,000 mt and to maintain production at the same level in August, MMK's vice president for strategic development Rafkat Takhautdinov stated at a press conference on Thursday.
According to Mr. Takhautdinov, in the first half of current year MMK increased its average monthly output by 25 percent compared to Q4 2009. In the second quarter, MMK produced 1.9 million mt of steel and expects to produce 8.4-8.5 million mt of finished products this year, down from 10.9 million mt in 2008, he said.
Meanwhile, MMK's vice president for sales Vladimir Shmakov pointed out that the company's exports have indicated an increase, especially of hot rolled coils, due to the rebound of the world market which has been felt since the beginning of June and which is expected to continue through August.
MMK's revenue in H1 2009 under Russian accounting standards amounted to Ruble 56 billion (approx. $1.76 billion), with sales totaling Ruble 9 billion (approx. $283 million), MMK chief financial officer Oleg Fedonin stated, adding that the company's financial results in the second half of the year are not expected to be worse.
MMK is currently carrying out negotiations on early repayment of its loans to VTB and Sberbank, in the amount of Ruble 4 billion and Ruble 6.5 billion respectively. The company has already repaid its Ruble 4 billion loan to Gazprombank.
The loans in question were secured for the construction of its new plate rolling mill 5000, the official commissioning of which has reportedly been delayed to July 24, as Russian Prime Minister Vladimir Putin is expected to attend the event. The hot testing of the mill started on June 26.
As SteelOrbis previously reported, MMK's new plate mill is to produce plates of 4,850 mm width and of X100-X120 strength characteristics for the oil and gas, shipbuilding, bridge building and machine building industries. The mill's annual capacity will be 1.5 million mt, including 300,000 mt of thermally treated steel plates. The total cost of MMK's plate mill project has amounted to Ruble 50 billion (approx. $1.57 billion).
In addition, MMK is also to commission its polymer coating line No. 2 with an annual capacity of 200,000 mt, the construction of which has already been completed. Currently, MMK produces around 17,000-18,000 mt of color coated steel per month, while its orders amount to 29,000 mt per month. By November 2009, the line is expected to reach its designed production capacity.
MMK produces 20 percent of the total steel output in Russia.