MMK sees demand, prices for metal products drop in Q2
MAGNITOGORSK. May 20 (Interfax) - OJSC Magnitogorsk Iron & Steel Works (MMK) has said it observes demand and prices for metal products decreasing this quarter.
"There is a certain amount of progress, but we have not regained the level of 2008. And one cannot say that we have emerged from the crisis," MMK's main beneficiary and chairman of its board of directors Viktor Rashnikov said. Demand for construction roll was down in March, and the company's production facilities have not been fully occupied in May-June. The first four months were better, he said.
The company's sales director, Nikolai Lyadov, said that the April-June production target is 850,000 tonnes of metal product monthly, versus the 990,000 tonnes it produced in January. Average steel-product prices dropped 9% in May from April. "With demand slumping on export markets, Ukraine and Kazakhstan, which are in the Customs Union, volumes have been redirected to the domestic Russian market, they are dumping, thereby capturing 9% of the market from us," he said.
Markets should stabilize in June, Lyadov said, since the export market has reached its peak decrease and will recover starting in July.
The MMK production plan for this year is 12 million tonnes of metal product. With the launch of Mill-2000, company production capacity will rise to 15 million tonnes.
As reported earlier, MMK halted operations at two arc furnaces with combined capacity of 4 million tonnes because demand for rolled sections on the Russian market was down. One of them was put back to work in mid-May, and MMK plans for it to produce 100,000 tonnes of steel this month. The other arc furnace remains shut down.