Russia’s MMK, one of the major flats producers, may experience some change in supply volumes following an accident at one of its mills that occurred on February 8. According to sources, a fire in an oil basement resulted in some serious damage to one of the producer’s cold rolling lines - its mill 1700 with an annual capacity of 900,000 mt.
It is unknown for now how long it will take to restore the equipment, though market players generally believe that the situation regarding MMK’s flat steel supply to the market will change. According to some estimations, MMK may lose around 40,000-50,000 mt of cold rolled coil output per month, which will result in a deficit first of all in the local market in Russia. In the meantime, Russian producer Severstal is still working on the launch of its four-strand CR line, which is expected at the end of the month. CRC prices in Russia are expected to increase; in addition, neighbouring countries may try to increase their supply volumes to the local Russian market, SteelOrbis understands.
Higher HRC allocation is another expected effect of the accident at MMK. While the producer was expected to be completely out of the export markets amid some serious maintenance works, some HRC volumes may now be allocated since its CRC production will be limited, SteelOrbis understands. “Some of the HRC volume will be released, which will make the loss due to the 2500 mill stoppage less crucial,” a source said. As reported earlier, MMK will stop its largest HR line for a few months of repairs starting from March.