Interfax Russia & Kommersant have reported that MMK's chairman Mr Viktor Rashnikov told a gathering at Chelyabinsk that Magnitogorsk Iron & Steel Works for the third month the plant has not been shipping products for export at all. He said “Due to the appreciation of the ruble and the introduced excise tax on liquid steel, the profitability of production has fallen to a minimum. We have experienced all sorts of crises, but this has never happened before. Profitability was 4% in May, and it would be good if we generate a profit in June of 1% here or 1.6% there, though this is generally dreadful. We have never operated like this. The production volumes are tonnes instead of the millions that we produced every month last year, while we load only 600,000 tonnes today and we have stopped two blast furnaces. We are working at 55-60% capacity. There is no profit here.” Mr Rashnikov added that, "The investment program is being halted. In order to implement the investment program that we have today, we need to have at least 15% profitability. We need 7-8 billion rubles to earn in order to support the volumes that we have.” Mr Rashnikov also noted that although coal and iron ore suppliers are lowering prices for supplied products, there is little room for maneuvering. He said “We are working with both ore and coal miners that are lowering [prices] in some areas, though not yet to the fullest, so to speak. However, they also have a margin that is not so large, and you cannot squeeze it, as the saying goes.”
Interfax Russia & Kommersant have reported that MMK's chairman Mr Viktor Rashnikov told a gathering at Chelyabinsk that Magnitogorsk Iron & Steel Works for the third month the plant has not been shipping products for export at all. He said “Due to the appreciation of the ruble and the introduced excise tax on liquid steel, the profitability of production has fallen to a minimum. We have experienced all sorts of crises, but this has never happened before. Profitability was 4% in May, and it would be good if we generate a profit in June of 1% here or 1.6% there, though this is generally dreadful. We have never operated like this. The production volumes are tonnes instead of the millions that we produced every month last year, while we load only 600,000 tonnes today and we have stopped two blast furnaces. We are working at 55-60% capacity. There is no profit here.” Mr Rashnikov added that, "The investment program is being halted. In order to implement the investment program that we have today, we need to have at least 15% profitability. We need 7-8 billion rubles to earn in order to support the volumes that we have.” Mr Rashnikov also noted that although coal and iron ore suppliers are lowering prices for supplied products, there is little room for maneuvering. He said “We are working with both ore and coal miners that are lowering [prices] in some areas, though not yet to the fullest, so to speak. However, they also have a margin that is not so large, and you cannot squeeze it, as the saying goes.”
