MMK sees Russia’s steel consumption rising at least 2% in 2023

MOSCOW, Jun 27 (PRIME) -- Integrated steel producer Magnitogorsk Iron and Steel Works (MMK) expects Russia’s steel consumption to rise by at least 2% in 2023, BCS World of Investment said in a statement on Tuesday following a conference call with MMK’s management.

“MMK confirms high loading of its facilities, and expects a sound result in April–June. The company’s track record of focusing on the internal market supports its operations. According to MMK, Russia’s steel consumption grew by 4.5% on the year in January–April,” the company said.

“Imports that stopped last year have also provided part of demand from local market participants. In the entire 2023, the steel producer expects growth of at least 2%,” it also said.

BCS said that MMK’s EBITDA margin amounts to 22–24% considering the price of hot-rolled products at below 30,000 rubles per tonne. The company’s net working capital is close to the level of 2020–2021, which was 13–15% of the revenue.

The group confirmed a negative net debt.

“According to our assessment, both in 2022 and in 2023, MMK’s free cash flow reached U.S. $800 million, or 13–14% of the capitalization,” BCS said.

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