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Russia’s MMK delays restart of steelmaking at Turkish mill

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Russian steel company MMK has delayed the hiring of personnel to run hot operations — made up of EAF, caster and hot strip mill — at its Turkey-based subsidiary MMK Metalurji, financial director Andrey Eremin said during the company’s first-quarter financial results conference call on Tuesday.

MMK had said in February that it planned to restart its Turkish meltshop some time in July. But the introduction on March 23 of a 25% tariff on steel imports to the US from certain countries including Turkey and the launch of an EU safeguard investigation into a potential deluge of steel imports related to these high US tariffs on 27 March have prompted a halt to MMK’s plans.

The combination of new barriers and looming threats to Turkish steel put in place in March resulted in a 6.3% year-on-year drop in the country’s steel exports in the first four months of 2018. It also triggered a drop in steel prices.

In a matter of just under the two months since mid-March, Turkish HRC has lost $45/mt, tumbling from $665/mt to $620 ex-works.

Profitability suffered too. In February, the additional margin of the steelmaking in Turkey reached $48/mt of hot-rolled coil, according to MMK Metalurji. The margin has since shrunk to $33-35/mt. MMK still finds the level attractive but it seems there is no confidence as to whether it will sustain in ever-changeable trade conditions.

MMK’s technicians, together with engineers from Danieli and other suppliers for the mill’s production facilities, are currently working on site to prepare the meltshop for the restart.

However, given the circumstances, no new date has yet been given and it is unlikely to happen until Turkish steelmakers have clarity on their trade arrangements with the US and the EU, something expected to happen in June.

Source: Platts

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