Russian iron ore miner and steel and metallics producer Metalloinvest has signed a five-year take-or-pay agreement with shipping operator Ultramar. This will support expansion of its exports of iron ore pellet and hot-briquetted iron (HBI) to northern Europe, the company says.
Operations are due to start in the second half of 2020, after Ultramar completes construction of a new dry terminal in Ust-Luga Port in Saint-Petersburg. This will be complete with railways, warehousing and berth facility to accommodate Panamax vessels. Construction of the terminal will be financed by Ultramar’s own and borrowed funds, it says.
Metalloinvest plans to ship up to 2.5 million tonnes/year of pellet and HBI from the port to northern Europe, namely Germany, UK and the Netherlands. The company is already supplying the region, but plans to expand output and shipments of higher-added-value (HVA) metallic products. This is in line with steelmakers’ growing requirements of higher-quality metallised feedstock amid tightening environmental rules for the steel industry, it tells Kallanish.
The company is continuously investing into moving its iron-containing products further downstream. HVA metallics’ share in iron ore sales increased by 8 percentage points on-quarter and 5pp. on-year in the first quarter to 74%. Iron ore pellet shipments rose 8% and HBI/DRI shipments 10% on-year. Europe’s share in exports grew 8pp. on-year to 26% in Q1, and Asia grew by 7pp. to 11%.
