Despite worries in the market, the steelmaking asset’s start-up has had no impact on the pig iron shipments from Tulachermet, Russia's largest merchant pig iron producer, run by IMH.

“Last week we started shipments of rebar to the domestic market [in Russia],” a source from IMH told Metal Bulletin. “For the moment we haven’t started the BOF [basic oxygen furnace], we re-roll merchant billets.”

IMH buys its billet from one supplier in the Russian domestic market, the above source said.

The first batch of rebar was “very small”, but IMH plans to deliver around 200,000 tonnes of long steel to the domestic and export market by the end of the year.

Tula-Steel has had hot trials to test the equipment since July but, officially, rebar production began last week, according to the company source.

“Now [the start-up at] Tula Steel has had no impact on our pig iron shipments,” the source said. “Even when we start the BOF we will keep our pig iron shipments at 2 million tonnes per year.”

In 2017, Tulachermet produced 2.276 million tonnes of pig iron and exported around 90%, the source said.

The Tula-Steel steelmaking operations include a 1.6-1.9 million-tpy BOF and two linked 1-million-tpy light and medium-section rolling mills, as well as a separate common wire rod production unit.

The combined capacity of the long steel production units will be 1.5-2 million tpy, depending on the steel grades being manufactured, while the wire rod production unit will have capacity for 500,000 tpy.

Tulachermet currently has two operational blast furnaces - the No2 furnace with a capacity of 643,000 tpy and the No3 furnace with 1.495-million-tpy capacity.

The company plans to restart the 1.25-million-tpy No1 blast furnace by the first quarter of 2019 and will then halt No2 to avoid oversupply.

Tulachermet's pig iron output will be at around 2.7 million tpy, which should be enough to keep sales stable and feed Tula-Steel.

Tula-Steel should supply 60% of its products to the local market - mainly the central region around Moscow, which consumes around one third of long steel in Russia. The other 40% of products will be exported, mostly to other CIS countries but also to countries across Europe.

The price assessment for CIS-origin exports of low-manganese pig iron was at $390-395 per tonne fob Baltic Sea on September 13, falling from $400-405 per tonne fob the week prior. Export prices for the CIS pig iron market have been decreasing since July 19, with falling scrap prices in major outlet regions.

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