Metalloinvest cuts steel billet output

MIAMI: Russian steel and raw materials producer Metalloinvest is reducing its steel billet production as Iran's sanctions hit sales of this product and is increasing its pig iron output instead, a company executive said on Tuesday.

Sanctions imposed by the European Union last autumn on sales of steel and other key materials to Iran have prompted most traders and producers to halt sales and have hit hard Russian steel producers, which were heavily reliant on the Iranian market. [ID: nL5E8M968X]

"Before Iran was our main market for billet but as you know Iran is now sanctioned and we cannot do anything there so we decided to hold billet production and make more pig iron," Vakhtang Kocharov, a senior iron trader at Metalloinvest Trading, said in an interview on the sidelines of a CRU Ryan's Notes Metallics meeting.

Kocharov trades hot briquetted iron (HBI), pig iron, and direct reduced iron (DRI). The CRU Ryan's meeting brings together suppliers and consumers of pig iron, HBI and DRI.

Metalloinvest, controlled by Russia's richest man Alisher Usmanov, currently produces about 100,000 tonnes of pig iron per month and it forecast it will be able to double the amount it can sell within the next couple of years, as less of this steel raw material will be used to produce billet.

Kocharov underlined that the switch from billet production to pig iron production was not final as things might change based on the political situation in Iran.