Russian steel consumption will recover to pre-Covid-19-pandemic levels no earlier than mid-2021, says MMK deputy general director for sales Sergey Ushakov. Consumption in January-July decreased by -8.4% on-year.
After passing the lowest point of recession in the second quarter, consumers are adapting rapidly to the changed working conditions and striving to restore the previous way of work, Ushakov says.
“The most likely scenario for the further development of the situation is a prolonged recovery of the market,” Ushakov comments. “This includes state support for national projects, support for mortgage lending and apartment construction, a programme for renewing the Russian Railways, for the machine-building sector and stimulating the automotive industry.”
MMK also plans to develop a new sales strategy, since its supplies to large metal trading groups, regional traders and small and medium companies are consistently strong. About 50-60% of sales are accounted for by independent companies.
Product is being sold by its own distribution network – MMK Trading House (TD) – which is reaching out to consumers with whom the steelmaker does not have direct contracts due to the low-tonnage orders, Kallanish notes.
TD has a developed warehouse network consisting of 30 sites in Russia, as well as five divisions in Kazakhstan. It works also with small businesses and is developing market niches, including the segment of high-strength and wear-resistant rolled products.
Since 2014, MMK’s sales through its own trading house have grown by 31%.
