MOSCOW, January 25. /TASS/. MMK Group’s steel production increased by 11.1% in 2023 compared with 2022 to 12.98 mln tons. Pig iron output rose by 9.5% to 9.9 mln tons, the company reported.

Group sales of metal products went up to 11.78 mln tons, "reflecting strong business conditions on the Russian steel market due to robust construction activity and increased demand from automotive and machine-building industries, as well as expansion of sales to neighboring countries markets," MMK said.

Sales of premium products increased by 7.1% in 2023 compared with 2022 to 5 mln tons driven by higher sales of cold-rolled, galvanized and polymer-coated steel. The share of premium products in the sales portfolio declined to 42.8%. Production of coal concentrate slightly decreased in the reporting period to 3.48 mln tons, the company said.

Q4 results

Steel output totaled 3.1 mln tons in October-December 2023, down by 7.1% quarter-on-quarter, while pig iron production equaled 2.4 mln tons, down by 7.5%, the report said.

Group sales of metal products declined by 5.7% in Q4 quarter-on-quarter to 2.89 mln tons, reflecting the impact of overhauls of blast furnace, basic-oxygen furnace and rolling capacities.

Sales of premium products decreased by 10.8% in the reporting period to 1.19 mln tons due to lower sales of cold-rolled, galvanized and color-coated steel amid overhauls of rolling capacities. The share of premium products in the sales portfolio declined to 41.3%.

Sales of metal products in Q1 2024 will be impacted by a seasonal slowdown in construction activity in the Russian market as well as a reduction in customers’ metal inventories due to higher Bank of Russia key rate, the company said.

"Demand for metal products is expected to pick up towards the end of Q1 2024 - beginning of Q2 2024 as customers replenish their inventories and construction activity picks up seasonally. At the same time, a slowdown in the residential construction market will limit further growth in metal products consumption, reflecting the lagged effect of the higher key rate," the report said.

Demand for metal products from other industries, including automotive and machine-building, is expected to largely compensate for a slowing housing market and maintain the overall positive dynamics of metal consumption in Russia. "At the same time, the scheduled overhaul program of MMK’s blast furnace, basic oxygen furnace and rolling capacities will be a stabilizing factor for the supply-demand balance in the metal products market in Q1 2024," MMK said, adding that it will continue to maximize premium products capacities utilization.