Russia’s MMK has officially announced that it has restarted operations at its meltshop at Turkey-based MMK Metalurji, which was idled back in 2012 due to unfavourable market conditions.
Currently, the company is conducting the first stage of hot trials at its furnace and expects to start commercial production shortly.
“We invested about $40 million to restart this production facility. After restarting the hot section and reaching its full capacity, we plan to produce about two million tonnes of hot rolled coils per year, which will allow our Turkish asset to gain a significant increase in EBITDA,” Pavel Shilyaev, CEO of MMK, stated commenting on the start of hot tests at the electric arc furnace.
Moreover, MMK Metalurji, has already started selling hot rolled coils (HRC) to the domestic market. According to sources, the company has almost sold out its September production volumes, which were planned at 30,000 mt. Overall, in 2021 the mill expects to produce 200,000-260,000 mt of HRC and to reach maximum capacity utilization next year.
MMK Metalurji returning to the market as a producer is by many considered as a game-changing factor in Turkey. Within the past years, the mill has been an important HRC importer with its Russia-based mother company as a main source of supply. Market players estimate the average monthly purchases at 40,000-80,000 mt depending on MMK Metalurji’s coated steel export sales and the general market situation. With the gradual increase of capacity utilization, if the production goes smoothly the company is expected to minimize the imports and to sell HRC regularly itself. In this situation, Russia’s MMK will have additional HRC volume to sell. “On the one side, Russia has an export duty now and exports will be less marginal for the coming five months. On the other side, mills cannot redirect volumes to the local market as it is already full so they will have to export anyway. And MMK is the biggest in terms of HRC production in Russia,” a trader told SteelOrbis.