Severstal Cherepovets, the main steel producing facility of Severstal Russian Steel, has resumed working at full capacity since August 2009, i.e. about 900,000 mt of steel per month, as the demand from domestic pipe producing and shipbuilding companies increased.
"In September we delivered about 850,000 mt of finished steel products, while the September weighted average price for rolled products was ten percent higher compared to August. Our program aimed at cutting costs, allows us to expect a further high capacity utilization level of our production facilities," Severstal Russian Steel's CEO Anatoly Kruchinin stated, adding that in October the plant will maintain its September output level, while the long-term forecasts are untimely.
In order to satisfy its customers, as well as other subsidiaries of Severstal Russian Steel, Severstal Cherepovets brought forward to the end of the autumn the repairs of some of its units, including the repair of mill 5000, and implemented some organizational measures, directed towards the increase of its productivity.
In the second half of the current year, the domestic pipemakers have increased their demand for steel in line with the construction of oil and gas pipelines. "The demand has increased a bit," Mr. Kruchinin said. In the first six months of 2009, Severstal's pipe plants were operating at half of their production capacities, due to the declined export and local demand.
According to Mr. Kruchinin, this year Severstal's most stable customers have been shipbuilding companies, increasing their orders by 20 percent year on year, and pipe producers, which raise the steel orders in the second half of the year. However, machine building companies will decrease their orders by 42 percent this year.