Zagorsk Tube Plant (ZTZ), one of the large pipe producers in Russia and a significant supplier to the OCTG sector, is in negotiations with Russia-based Metalloinvest regarding the purchase of one of the holding’s assets - Ural Steel. The asset is a 1.9 million mt per year pig iron and steel producer and the purchase, if it happens, is expected to help ZTZ to secure round billet feedstock in order to strengthen its position in the seamless pipe segment and to improve its business efficiency overall, SteelOrbis understands.
Metalloinvest, in its turn, may also benefit from the sale of Ural Steel as the mill is traditionally seen as the least competitive one of all the holding’s assets, partly due to its unfavourable location. If the deal is done, Metalloinvest will have more resources to concentrate on strategic development of its mining assets and on its steelmaking facility OEMK which has an annual capacity of 3.8 million mt.