Russia's MMK says output could jump 15 pct

Fri Jan 27, 2012

* MMK says finished steel output could jump 15 pct this year
* Says Russia steel consumption to grow faster than world avg
* Moscow analyst says steel prices bottomed Dec-Jan
* MMK Q4 crude steel output off 2 pct from Q3

MOSCOW, Jan 27 (Reuters) - Magnitogorsk Iron & Steel Works, Russia's third-largest steelmaker, said on Friday that 2012 finished steel output could increase by 15 percent from last year and that demand will be stronger at home than abroad.

"It is expected that steel consumption in Russia will grow in 2012 faster than the world at average," the company said.

"Steel consumption growth, realised investments in equipment modernisation and mastering of new products will help MMK to increase production of finished products in 2012 at its Russian facilities."

Analysts have noted some positive trends in steel demand recently, following price declines in the third quarter on weaker European demand and a decline in Chinese daily output.

"We believe that Russian export steel prices bottomed in December-January; they have increased $30-40/tonne (5-7 percent) year-to-date," Uralsib analyst Dmitry Smolin wrote in a note.

"Our understanding is that the steel price increases are a function of improved export and domestic demand, as well as restocking in Europe and other regions due to very low inventories."

Fourth quarter production at Russia's steel majors was largely flat compared to the previous quarter on seasonal demand factors at home and weak markets abroad.

Evraz, Russia's largest steel producer, said last week that fourth quarter crude steel volumes increased by 3 percent quarter-on-quarter.

MMK, controlled by billionaire Viktor Rashnikov, said fourth quarter output was 3.1 million tonnes, off 2 percent from the previous quarter.

Full year 2011 crude steel output reached 12.2 million tonnes, up from 11.4 million in 2010, the company also said.

(sourced Reuters)