Fire at MMK may limit ex-CIS HRC allocation for November

Fire at MMK may limit ex-CIS HRC allocation for November

MMK, one of the key Russian hot rolled coil (HRC) producers, had an accident at its rolling mill on September 21. On the mentioned day, the company experienced a fire at one of the two roughing stands at its mill 2500. For now, there is no solid information about possible damage and the consequences for HRC production. According to the company source, MMK is currently evaluating the situation.

HRC market players are interested in how the situation will develop, taking into account that MMK was expected to be the only Russian mill to give a solid export allocation for November, while Severstal and NLMK will have only limited volumes to sell, as SteelOrbis reported previously. If the damage done to the mill is serious and if it will take a while to restore production, MMK might have a reduction in its allocation. “If it is bad, they [MMK] will have pending orders from October and there might be not enough volume to be exported for November,” one Turkish trader assumed. In fact, Turkish mills are expected to benefit the most if this is the case as, with MMK being limited in volumes, the pressure in the import segment in Turkey in terms of prices would ease.

It is worth mentioning that MMK’s mill 2500 has been undergoing reconstruction since the first quarter this year as the company has been working to increase its productivity and to switch to big coils only. After the modernization, the mill was expecting to produce up to 5.2 million mt of HRC per year, with around 2.5-3 million mt being sold to third parties, SteelOrbis understands.

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