ММК improve sales efficiency

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.