Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced that it has signed an agreement with Russia-based steel pipe producer TMK to apply a formula when calculating the pricing of wide hot rolled sheet shipped to TMK enterprises. The mutually beneficial agreement sets out the price formula to be applied to steel sheet products supplied up to the end of 2015.
MMK is expected to ship wide hot rolled sheets to TMK's Volzhsky Pipe Plant, for the production of large diameter (LD) pipes intended for Gazprom's major Russian gas pipeline projects, including Power of Siberia, South Stream, and Bovanenkovo-Ukhta. The agreement demonstrates MMK's commitment to supply metal products to pipe companies producing large diameter pipes for strategic cross-country pipelines. In addition, agreements with pipe producers will allow MMK's steel plate production facilities to run at guaranteed capacity, namely at its mill 5000. In turn, the key parameters of the price formula for MMK sheets were agreed in line with the LD pipe formula applied by TMK and Gazprom.