The Russian steelmaker Novolipetsk Steel (NLMK) has announced that it has restarted the transformer steel production shop at its main production site in Lipetsk, as the transformer steel market has started to improve after an unprecedented slump in demand in November 2008.
Due to a slowdown in electrical steel sales in the international market, in April 2009 NLMK's transformer steel production shop in Lipetsk was stopped for upgrading to improve product quality and increase production efficiency. Since April, transformer steel has only been produced at the company's VIZ-Stal facilities located in the Urals, resulting in the optimization of equipment utilization and the reduction of fixed costs.
In line with NLMK's production program from September to the end of 2009, the output of its transformer steel production shop in Lipetsk is to amount to 1,700 mt per month. This will allow the company to increase its sales in Q4 2009 in accordance with market demand.
NLMK is one of the world's leading transformer steel producers with a 20 percent share of the global transformer steel market and a 100 percent market share in Russia. NLMK's total transformer steel production capacity amounts to approximately 350,000 mt per year, including 160,000 mt capacity at Lipetsk and190,000 mt capacity at VIZ-Stal.
During the first six months of 2009, NLMK produced 47,000 mt of transformer steel, while its sales of transformer steel decreased by 61 percent year on year to 66,600 mt. The main consumers of NLMK's transformer steel are large producers of electrical equipment in China, Europe, the US and Russia.