AvtoVaz leaves NLMK for Samsung

It has been reported that the Russian car maker AvtoVaz will no longer be ordering supplies of flat rolled products from Novolipetsk Steel (NLMK), which it has up to now been using in the manufacture of its Lada cars. Instead, AvtoVaz has decided to start buying flat rolled steel from Korea-based Samsung Cooperation, and has already concluded a supply agreement for delivery of 6.5 million metric tons in 2007 with the company. According to the report, the main reason behind AvtoVaz's decision is the price advantage offered by the Korean steel maker. AvtoVaz uses sheets with width of more than 600 mm in its production of Lada cars and NLMK is the only steelmaker in Russia which manufactures this kind of flat product. However, because of NLMK's high prices, AvtoVaz decided to switch to Samsung, whose prices are six percent lower and whose sheet quality is superior to NLMK's.