Torex-Khabarovsk to supply Posco-Daewoo with billet

Posted on 08 August 2018

Source: Kallanish

Russian far eastern scrap-based steel producer Torex-Khabarovsk, previously Amurmetal, will start supplying 300,000 tonnes of billet contracted for August-December 2018 to Korea's Posco Daewoo this month.

Torex-Khabarovsk has been steadily increasing its output after the Russian scrap procurement company Torex bought the bankrupt Amurmetal mill in January 2017 and restarted operations under the new name in July 2017. The mill produced 264,000t of finished steel products in the first half of 2018, Victor Kalashnikov, deputy head of the Primorsky district government says.

The mill is currently undergoing long products rolling shop modernisation, which will see reheating furnace, heat-treatment line and packaging unit upgraded and finished product output rising to 700,000 tonnes/year. The equipment is being supplied by Italian engineering company D-Steel, Kallanish notes.

Meanwhile, plans for installation of a new mini blast furnace are also going ahead, aimed at increasing crude steel output to 1.5 million t/y while reducing reliance on scrap, and reducing production costs by -40%. Works are penned to start in September, and complete in 2019. Iron ore feed is likely to come from the fellow far eastern company Petropavlovsk Iron Ore.

With over 60% of output currently exported, the company aims to increase sales of finished products to the domestic market to 50% in 2019. Following disruptions in operations during the past five years, the mill is aiming to regain its market share in domestic and export markets. Raw materials supply remains an issue however, due to high railway tariffs due to the mill's geographical location. 

Amurmetal's efforts to secure sufficient scrap supply to the mill have paid off recently, as the government-imposed scrap export restrictions through several far eastern ports. Russia exported 1.4 million tonnes of ferrous scrap from far eastern ports last year, mainly to South Korea.

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