December 02, 2008

MMK to supply automobile steel sheet to Chinese automakers

Interfax China reported that Russia's Magnitogorsk Iron & Steel Works intends to supply automobile steel sheet to China through its high strength steel sheet complex in the near future.

The report quoted Mr Valentin G Pugachiov acting head of MMK's strategic planning administration at the Asia Ferrous Metal Development Dialogue 2007, held in Beijing as saying that "China can produce 6 million cars per year and we expect the figure to grow to 9 million in two years. Ideally, we aim to supply up to 40% of the steel sheets needed for China's car manufacturing by then, through our new complex in Russia.

He said that “We currently only export 15,000 tonnes to 20,000 tonnes of steel products per month to China. Compared to our enormous output, these exports are nothing."

He added that "As for how MMK will supply China, it is still too early to say. We have talked with China Minmetals Corporation about possible cooperation, but no agreement has been settled yet as we have to wait until the complex becomes operational. We are also considering building stamping or car assembly joint ventures with Chinese companies in China."

Mr Pugachiov said that MMK is currently in the process of setting up the new high strength steel sheet complex in Magnitogorsk to serve the automotive industry. The complex has a designed production capacity of 2 million tons of steel sheet per annum and is scheduled to commence operations in mid 2010. The complex will use state of the art technology from ThyssenKrupp to produce advanced high strength steel sheet, and the company believes that the steel sheet produced will reduce steel consumption in automobile manufacturing by 20%