MMK expects modest production growth in 2024 thanks to Turkish plant

MOSCOW. March 15 (Interfax) - Magnitogorsk Iron & Steel Works (MMK) expects modest growth of steel production in 2024 on the back of a partial recovery in output at its Turkish plant, the Russian steelmaker's deputy director for investor relations, Ilya Nechayev said on Telegram channel Market Power.

MMK produced 12.99 million tonnes of steel in 2023, including 12.6 million tonnes in Russia. Production in Turkey plunged 57.4% to 381,000 tonnes, the company said in its annual report.

Despite the difficult economic situation in Turkey, MMK Metalurji remains profitable, Nechayev said. The company did not specify the plant's current profit margin and the target for this year.

"In terms of the recovery of volumes at our Turkish asset, we expect an increase in sales this year," Nechayev said.

MMK Metalurji includes an electric furnace melting shop with a casting and rolling facility, cold rolling mill, continuous hot dip galvanizing line, polymer coating line and metal service center. The plant has design capacity of 2.3 million tonnes.

MMK, its Turkish plant and the group's controlling shareholder Viktor Rashnikov were included in the U.S. Specially Designated Nationals List (SDN List) in the summer of 2022.

Commenting on the possibility of mergers and acquisitions, MMK sustainable development and investor relations director Yaroslava Vrubel said that integration in iron ore products is not currently possible for the group given the "very limited number of available assets" and unattractive prices. MMK is also not considering deeper integration in coal following the acquisition of the Tikhov mine.

MMK's free cash flow will be higher than last year's figure of 30.7 billion rubles, Vrubel said.

MMK expects steel prices on the domestic market to increase by 1-1.5% in 2024, reflecting cost inflation.