Jaway Stainless Steel

ArcelorMittal Temirtau buoyant by CIS demand

Reuters reported that ArcelorMittal would invest up to USD 450 million a year in its operations in Kazakhstan until 2015-16 as it expects other ex Soviet states to raise demand for the metal.

Mr Frank Pannier CEO of ArcelorMittal Temirtau said "Our investments in Kazakhstan in general stand at around USD 400 million to USD 450 million a year."

He said that crude steel output at Temirtau could fall to approximately 3.8 million tonnes this year from the originally targeted 4.0 million tonnes, largely due to sluggish demand in the first quarter and a lack of transportation capacities in June.

He added that "Over 50% goes to CIS markets Kazakhstan, Russia, Uzbekistan, Azerbaijan and so on. Around 35% is Iran and the 'far abroad accounts for the rest, while supplies to giant neighbor China are almost nil."

Mr Pannier said "We see pretty strong growth in consumption in the regions where we sell. We see our sales to the CIS grow year by year. We see here annual growth at the level of around 12% to 14%."

He said that "We hope that market conditions will be favorable and by 2015 we will be able to achieve the level of 6 million tonnes."

Mr Pannier said "If then it turns out that there is extra demand for larger volumes and we are able to find new sources of raw materials in the country, then it is quite possible that shareholders will take a decision to build a new plant."

He said that "We had already coordinated plans on expanding output to 10 million tonnes of steel and then in literally two weeks the global financial crisis broke out."

He said ArcelorMittal might still revive its plan of building this 4 million tonne plant after 2015, adding this would hinge on the growth in demand for steel.

He added that "The United States and Europe still feel the consequences of this crisis. Significant changes on the market can be expected only after 2013-14."

Sales to Iran, at the same time, are likely to remain hostage to the changing political situation. Mr Pannier said "For instance, sanctions on the part of the United Nations are possible. I hope today that no such problems will arise with Iran."

He said that “But even if events take such a turn, I believe we will find a market for Iran volumes there was always demand for Temirtau metal across the globe. Kazakhstan once used to sell its metal output to 96 various countries."