Metalloinvest unpegs prices from export indexes

MOSCOW. Nov 9 (Interfax) - Metalloinvest has unpegged prices for iron ore products shipped to the domestic market from export indicators, the Russian iron ore and steel group's CEO, Nazaim Efendiyev said on the sidelines of Metal Expo.

Efendiyev said in the summer that Metalloinvest more than tripled shipments of hot-briquetted iron (HBI) to the Russian market year-on-year to over 650,000 tonnes in the first half of 2023. In all of 2021, when the company last published financial statements for restrictions were imposed on disclosure, Metalloinvest produced 4.5 million tonnes of HBI and exported most of it.

In the spring of 2022, when many Russian steelmakers were operating at around 50% of capacity, Metalloinvest slashed prices on ore for steel production by at least half, despite signed contracts with customers and prices stipulated in them, Efendiyev said.

"We saw that our partners were not operating at full capacity and went to them and said, guys, how much should iron ore cost in order to provide a workload for production facilities? Forget that we have signed contracts with you, forget that you're obligated to fulfil them. Tell us, name a figure so that you can load up and decently continue your operations," Efendiyev said.

They named a price and Metalloinvest reduced its prices "by half or more" and "gave all our partners a chance to recover," he said.

Now iron ore prices have already "more or less recovered on the domestic market, but the company has unpegged from export indexes" because it does not export its products, including to Europe, due to sanctions, Efendiyev said.

In its last published report, for 2021, Metalloinvest said it shipped about 39% of its products, including HBI/DRI and steel, to the Russian market, 29% to Europe, 9% to Asia, 6% to the Middle East and 5% to CIS countries other than Russia.