Azovstal switches to long-term contracts on slabs

Leman Commodities, exporter of Ukrainian steelmaker Azovstal's products, in late 2005 started to sell most of its merchant slabs under quarterly contacts. Approximately 70-80 percent of all sales have been done according to quarterly agreements by now. In the second quarter of 2006, almost all sales will be done according to long-term contracts and spot deals will be almost eliminated. The company announced that it will fulfill all contractual obligations despite the breakdowns at blast furnace No. 3 and considerably grown spot prices of slabs in the world markets. In May-June the producers will reportedly increase the volume of merchant slab outputs; however, the exact figures have not been announced yet. In late May-early June Azovstal is expected to sign contracts on remaining volumes for the third quarter of 2006.