MMK might supply USC with 150,000-200,000 tonnes of ship steel next year
MOSCOW. Nov 29 (Interfax) - OJSC Magnitogorsk Iron & Steel Works (MMK) might deliver 150,000-200,000 tonnes of steel to United Shipbuilding Corporation (USC) next year and, within three years, could increase total annual deliveries to 300,000-400,000 tonnes, USC president Roman Trotsenko and MMK general director Boris Dubrovsky said following the signing of a memorandum on strategic partnership.
Dubrovsky said that ship steel accounts for 1%-1.5% of MMK's current order portfolio. The workload at MMK's Stan-5000 facility will come to 50%-60% at the end of this year. He said that ship-steel orders might increase to 25%-30% of the company's portfolio within three years.
MMK's workload is now around 85%. According to Dubrovsky, this figure is expected to decrease by five percentage points in December in comparison with November and by 15 percentage points in comparison with October. He expects the market it hit a low in December-January, after which growth will start.
MMK is still getting certified for ship steal production. The majority of product types have been certified. This process should be complete in the first or second quarter of 2012.
USC's metal demand now comes to 800,000 tonnes but, according to Trotsenko, this figure should increase by 25% annually. The corporation now purchases ship steel from Severstal and from imports (around 20%)
MMK will take part in all tenders for supplying USC with ship steel. The first tender of this type will take place in December.
MMK plans to increase the workload at Stan-5000 to 80% in the second quarter of 2012, by diversifying the order portfolio.
The reduction of Russian gas giant Gazprom has caused a decrease in demand, and, consequently, production at Stan-5000. As a result, MMK will focus on finding new clients in sectors such as shipbuilding and heavy machine building inside and outside of Russia in the first quarter.
Stan-5000's capacity comes to 1.5 million tonnes a year. The main consumers of the facility's production now are Chelyabinsk Pipe Plant (ChTPZ), Volga Pipe Plant (VTZ, part of the TMK group), Vyksunsky Metallurgical Plant (VMZ, part of the United Metallurgical Company), and various Russian shipbuilders and carmakers.
MMK is one of Russia's biggest metal products makers. Its main beneficiary is the chairman of its board of directors, Viktor Rashnikov.