Ukrainian steel producer Industrial Union of Donbass (ISD) has signed an offtake agreement with Lebanese steel trader Litat Group to supply 4.8 million mt of rolled steel products (3.6 million mt of billets and 1.2 million mt of slabs) to Middle Eastern countries within the current year.
Accordingly, the agreement provides for the preliminary financing of production for the orders of Litat Group.
ISD has been collaborating for more than eight years with Litat Group in the field of sales of steel products manufactured by its subsidiaries Alchevsk Iron and Steel Works (Alchevsk) and Dneprovsky Iron and Steel Works named after F. Dzerzhinsky (DMKD). The company's average volume of sales to Litat Group amounts to 4 million mt of rolled steel products per year.
"The 20 percent increase in annual sales to the Middle Eastern group will be concentrated at Alchevsk, as ISD's other mill DMKD is currently operating at near full capacity. Alchevsk exported roughly 0.6 million mt of billets last year, and we project both billet production and sales will rise by roughly 0.4 million mt to 1 million mt this year. The new order supports our view that Alchevsk will be Ukraine's top steel sector performer this year, boosting both steel and rolled product output by 18 percent year on year to 4.25 million mt and 3.93 million mt respectively," BG Capital's metals and mining analyst Eugen Dubogryz said.