Leading specialist of the Strategic Development Group at
Magnitogorsk Iron and Steel Works (MMK) Igor Sapozhnikov spoke about
the Group’s export sales at the 17th CIS Steel & Raw Materials
Exports Conference. Historically, the Russian market has been MMK’s
priority, but export sales are also important for the
Group. Shipments to Russian consumers traditionally
dominated MMK Group's sales structure: in 2020, their share reached
68% of total sales. A further 12% came from markets in the former
Soviet Union, and 19% from customers outside the post-Soviet space.
“The Russian market is more marginal for MMK due to the Company's
geographical location in Russia’s Ural region, where steel is in
particular demand, and also due to the fact that the region is far
away from seaports,” Igor Sapozhnikov explained. Thanks to its wide
range of metal products, strong relationships with customers,
high-quality service, fast delivery, and a favourable geographic
location, MMK holds a leading position in the Russian domestic
market. Nevertheless, exports are also important for MMK
Group: Through sales to foreign markets, the Company is able to
utilise all its capacities and expand its global presense, including
on premium products markets. Hot-rolled products dominate MMK's
export sales – the most in-demand type of steel products in the
world, according to World Steel. “The demand for these products
remains stable and high,” Igor Sapozhnikov noted. The
largest volume of MMK's export sales in 2020 came from countries in
East Asia. However, the situation changes every year: the Company
adheres to a flexible export policy and can quickly redirect supplies
to other markets in case of unfavourable sales conditions in any of
the regions. Diversifying export sales also helps MMK mitigate risks
from potential changes in trade legislation in any particular
country. An important event in terms of MMK Group sales to
foreign markets was the launch in July 2021 at MMK Metalurji (the
Group's Turkish asset) in Iskenderun of an electric steelmaking shop
with a casting and rolling module. It is due to produce up to 260,000
tonnes of hot-rolled products in 2021 – this volume will be
partially used as semi-finished rolled stock for further processing
(production of galvanized and coated steel) and partially sold to the
domestic Turkish and export markets. MMK Metalurji's strengths
include its premium product line that is unique to the Turkish
market, its environmentally friendly production with low greenhouse
gas emissions, and a favourable geographical location in close
proximity to Europe, the Middle East, and North Africa. “The
resumption of work at MMK Metalurji’s electric arc furnace will
allow the Group to strengthen its position in the Turkish market and
improve export sales efficiency by expanding our geographical reach,”
Igor Sapozhnikov said.
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