Reuters quoted Magnitogorsk Iron & Steel Works, Russia third largest steelmaker said 2012 finished steel output could increase by 15% from last year and that demand will be stronger at home than abroad.

The company said "It is expected that steel consumption in Russia will grow in 2012 faster than the world at average. He said that Steel consumption growth, realized investments in equipment modernization 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.

Mr Dmitry Smolin Uralsib analyst wrote in a note that "We believe that Russian export steel prices bottomed in December to January; they have increased USD 30 per tonne to USD 40 per tonne year-to-date."

He said that "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 largest steel producer said last week that fourth quarter crude steel volumes increased by 3%QoQ.