Russian steel maker Magnitogorsk Iron & Steel Works (MMK) expects improved domestic pricing in Q1 2020. The steelmaker indicated that improved pricing in Asia was likely to strengthen the Russian domestic market.
The company also expects larger price increases for rolled steel shipped to Turkey due to the rising prices for ferrous scrap imports, tight supply of hot-rolled steel with the Black Sea region, and several other favorable factors.
However, these changes are not likely to happen until the end of Q1 2020, which will see raw material prices remaining at the same 2019-end levels, MMK indicated. Raw material prices are likely be strengthened by the steadying iron ore markets steadying compared to the variations seen in 2019 along with a healthy supply in the coal concentrate market.
In 2019 the Russian steel producer’s pig iron production rose by 1.6pc compared to the prior year, due to fewer maintenance efforts at its blast furnaces compared to 2018. MMK’s pig iron production increased by 1.7pc in Q4 2019 compared to Q3 due to better blast furnace productivity.
The company’s steel production decreased by 1.6pc in 2019 compared to 2018 due to reconstruction efforts at its hot-rolling Mill 2500, which resulted in less steel demand. Steel production also decreased by 3.9pc in Q4 compared to Q3, due to seasonally lower demand.
The steelmaker’s finished products sales decreased by 3pc to 11.3mn mt in 2019 compared to the prior year, while its finished products sales decreased by 4pc to 2.78mn mt in Q4 2019 compared to Q3.
MMK reported that its continuous hot-dip galvanizing unit No 3—built in 2017, with a capacity of 360,000 mt per year—produced 334,600mt of galvanized metal in 2019, up from 278,900mt produced in 2018.
The company indicated that global market prices improved for hot- rolled steel by the end of Q4 2019 as consumer demand increased and orders were scheduled for the beginning of 2020.
The increase in export prices lead to improved spot prices for hot-rolled steel in Russia in January 2020, However, the rate of increase was lesser than the global market, due to seasonality.