MMK’s steel sales to face pressure in Q4 amid start of slowdown in global market

Thursday, 14 October 2021 11:27:30 (GMT+3)   |   Istanbul
       

Russian steelmaker MMK Group has released its operational results for the third quarter and the first nine months this year.

Accordingly, in the third quarter this year, the company’s crude steel output totaled 3.39 million mt, slightly decreasing by 0.3 percent quarter on quarter, reflecting favorable market conditions and the launch of the electric arc furnace facility at the Turkish asset, while its pig iron production decreased by 0.6 percent compared to the previous quarter totaling 2.62 million mt. In the given quarter, MMK’s finished steel sales totaled 2.76 million mt, down 16.8 percent compared to the previous quarter, driven by an increase in exports with longer delivery lead times.

In the first nine months this year, the company’s crude steel output totaled 10.09 million mt, increasing by 22.1 percent year on year, as no overhauls took place at converter facilities, and also due to the completion of the hot rolling mill 2500’s modernization. MMK’s pig iron production in the given period increased by 14.8 percent year on year to 7.83 million mt. In the January-September period this year, the company’s finished steel sales totaled 8.98 million mt, up by 16.5 percent year on year, driven by the high utilization rate of hot rolling mill 2500 after its modernization.

The company’s Turkey-based subsidiary MMK Metalurji’s total sales in the third quarter this year increased by 12.9 percent quarter on quarter to 249,000 mt, reflecting the favorable market conditions and the launch of the hot-rolling complex in July, while its total sales in the first nine months totaled 665,000 mt, up by 27.7 percent year on year, driven by the release of pent-up demand that built up throughout the pandemic and the lockdown restrictions of 2020. At the same time, exports exceeded domestic sales in Turkey.    

According to MMK, a contraction has started in the global market and the seasonal business slowdown in Russia will exert pressure on the company’s sales in the fourth quarter. However, the increase in output by the company’s Turkish asset will support sales. High utilization of equipment that manufactures premium products will be beneficial for the company’s sales portfolio. Operational excellence measures implemented under MMK’s updated strategic initiatives will further boost the company’s profitability in the fourth quarter this year.


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