NLMK counts on investments in the USA

NLMK's investment strategy for US assets is ready for implementation. It is only a matter of time before this should be done, said company chairman Vladimir Lisin during a media briefing.

“NLMK invests where the market is: we controlled part of the US slab import market and planned significant investments to improve product quality and expand the product range,” he said. “But since the sanctions and import duties have been imposed, we have become spot buyers of the slab, and we do not currently consider such an investment to be economically viable. But that's okay, we can wait until the relationship is settled. "

Since Washington imposed a general 25% import duty on all steel products a year ago, NLMK has moved from importing unused Russian plate to sourcing slabs in the trading market, mainly from Brazil. But in the last two weeks, as import duties for Canada and Mexico were temporarily canceled, NLMK began to look into the possibility of purchasing slabs in these two North American countries.

“It was clear that the Brazilian slab quota would expire by July 1, and the lack of supplies would drive up prices in the US domestic market, leaving domestic producers (rollers) much less satisfied,” Lisin said. He added that NLMK will monitor the situation, holding the planned investments of $ 400-600 million until they become economically viable.

The US slab timeframe has been beneficial for NLMK as it is upgrading its blast furnace and converter, cutting about 2 million tonnes of steel from its production this year. “We sent to the USA about 2 million tonnes of slab per year, which we are now buying on the spot market, leaving us only 1 million tonnes of additional slabs for sale,” said NLMK CEO Grigory Fedorishin.