The rumors about the stoppage of one of the major billet exporters in Far Eastern Russia, Amurstal, have turned out not to be true after all. According to the mill’s CEO, Amurstal is continuing to operate, though its output has been reduced in December. As a result, Asian billet customers are unlikely to face cancelations of contracts; however, some customers have reported delays of shipments.
As reported in late November by Torex Group, which owns Amurstal, production was expected to stop in early December due to a scrap shortage and limitations of loans by banks. However, today Amurstal CEO Sergey Kuznetsov said that the plant will keep working, but that the output in December will be lower than initially planned. If previously the production plan for billet was 90,000 mt for December, now the steelmaker is going to produce 72,000 mt of billet and 21,500 mt of long products this month. “After the hype raised in the media, the plan had to be adjusted, and only last week we managed to stabilize the situation with the supply of scrap materials and the shipment of finished products,” the Amurstal CEO told the Russian news agency TASS. He also added that the plant has produced 16,500 mt of billet in December so far and that the new output target can be achieved.
Market sources said that the cargo that should be shipped from the mill to a customer in the Philippines in December has been deferred, but the management of Amurstal assured that no cancellation will happen. The mill is selling at least 50,000 mt of billet to the export market per month, SteelOrbis has learned.
One trader has secured 20,000-25,000 mt of billet for mid-January shipment from Amurstal, according to sources. The workable level for billet sales in the Philippines is assessed at $440/mt CFR, most suppliers believe, while customers are still bidding at closer to $435/mt CFR.
In 2018, Amurstal produced 650,000 mt of billet, while in 2019 it will increase output to 950,000 mt of billet, which is close to the full capacity of the manufacturer.