Ruble Devaluation Shifts Mill Demand
OJSC Magnitogorsk Iron and Steel Works (MMK; Chelyabinsk, Russia) has reached a record 5 million tons in total production of cold and galvanized rolled products at its Mill 2000, which primarily serves the automotive industry as well as household appliance producers and the construction industry.
With the launch in 2011 of Mill 2000, which was designed as a source for import substitution, MMK has been increasing its share on the domestic market as a producer of high-quality automotive sheet for locally operating Russian and international car brands. The trend of import substitution has recently intensified as manufacturers in Russia increasingly tend to switch to domestic suppliers instead of imports as a result of the recent ruble devaluation.
Mill 2000’s high-quality production, which meets the most advanced technical requirements, is widely recognized by local and international carmakers in Russia. MMK’s steel share in consumption has already reached approximately 60 percent by AvtoVAZ, the largest Russian car manufacturer.
In addition to local producers, MMK steel is purchased by major global automotive companies operating in Russia that include Ford, Volkswagen and Renault-Nissan. Also, samples have been sent for testing to Hyundai and Daimler. The steel mill is well positioned to further benefit from the current market environment as a producer of high-quality and cost-efficient automotive sheet of grades, sizes and mechanic specifications currently in demand.
