The Russian steelmaker Novolipetsk Steel (NLMK) has announced that it expects its 2008 steel output to decrease by 11 percent to 10.4 million mt, compared to the 11.6 million mt it had planned.
Steel production at NLMK's Lipetsk site is expected to decrease to 8.5 million mt compared to 9.4 million mt planned, while at its Maxi Group facilities steel production volumes will decline to 1.9 million mt, 12 percent lower than 2.2 million mt originally planned.
Due to a significant worsening in demand and lower prices for steel products in October and November 2008, NLMK has idled three of its blast furnaces, and is currently revisiting its 2009 production and investment plans.
"In the end of Q3 we witnessed a sharp drop in sales prices, as a result of a global financial crisis and massive steel market destocking. As the global economy continued its slowdown, in Q4 we witnessed further decline of demand for our products and had to face substantial production and sales cuts and price deterioration," vice president for finance & CFO Galina Aglyamova said.
"The company does not expect the situation to improve materially in H1 2009. Demand for steel products may start to grow in H2 2009 if the measures taken by the governments of the world's leading nations prove to be sufficient to restore consumer confidence, to support fixed assets investments and industrial growth," Galina Aglyamova added.