Despite the difficulties associated with the coronavirus pandemic, Magnitogorsk Iron and Steel Works (MMK) sold 7.43 million tonnes of steel products on the Russian market last year, in line with usual figures. About 30% (2.39 million tonnes) of this was sold to metal trading companies. Dmitry Cherepanov, Deputy Sales Director of MMK Trading House, announced these figures while speaking at the Regional Metal Trade Russia conference.
Dmitry Cherepanov added that, in 2020, metal product market participants were forced to work in conditions of unusually high uncertainty and volatility. Due to restrictive measures in Q2, the market sank by 19% compared to 2019, but in Q3 returned to its previous values, and at the end of the year experienced a new period of growth in demand and prices. By the end of the year, the overall decline in metal consumption in Russia was less than expected and amounted to 3.2%. The main growth factors in H2 2020 were deferred demand, the impact of state support measures, increased spending in the framework of national projects, increased housing construction and low inventory levels.
In 2020, MMK sold 7.4 million tonnes of steel products to the Russian market. The share of sales to metal trading companies was about 30%. Approximately half of this production volume was distributed to metal trading warehouses located in the "home" regions (the Urals, the Volga region, Siberia and the Far East). The most popular products were hot-rolled products and grades, which accounted for more than 60% of sales (34% and 29%, respectively).
Of MMK's total sales to the metal trading industry and metal service centres, about 40% is sold through its own sales network, MMK Trading House, which is the authorised representative of the plant in all regions of Russia and in the Republic of Kazakhstan. Currently, MMK Trading House has 32 separate branches in Russia (which allows for the sale of products to all leading industrial centres), as well as five branches in the Republic of Kazakhstan.
In 2020, MMK Trading House showed shipment dynamics similar to the general trends in the market – a decline in Q2 followed by growth in H2 2020. Overall, the increase in sales volume compared to 2019 was 11% (average order size also increased by the same amount), while shipments to construction industry enterprises increased by 17% thanks to state support measures, and sales to transport engineering enterprises grew by 18%.
Dmitry Cherepanov, Deputy Sales Director of MMK Trading House, also spoke about the Company's developing customer focus, which MMK considers as one of the key elements to further improving its competitiveness. One such step is the development of a corporate marketplace as part of MMK's digitalization strategy for sales of the Group and its partner's products on the Russian market.
The new service will have a number of advantages:
∙ Providing access for the end user;
∙ Allowing for the purchase of products directly on the online platform;
∙ Allowing users to receive information on orders at any time of the day;
∙ Allowing for the execution of low-tonnage orders and orders with a large set of different commodity items;
∙ Services for the delivery of products and credits;
∙ Simple and clear procedures: from placing an order to resolving product quality issues.
The marketplace will increase the demand for MMK Group products, increase sales efficiency and customer satisfaction.
The 14th national conference Regional Metal Trade Russia is being held in Sochi on 19-20 February 2021. The event is organised by Metal Supply and Sales magazine with the support of Metal-Expo and the Russian Union of Metal and Steel Suppliers. The conference participants include managers and specialists of metal trading and metallurgical companies, service metal centres (SMCs), metal processing equipment suppliers, companies that use steel products, commercial service employees and representatives of supply, sales and marketing departments. As part of the conference, participants assessed the experience of leading metal trading companies in difficult economic conditions, as well as predicting the main market pricing factors for 2021.