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MMK aims to support healthy competition in the steel market

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The report of the MMK top manager presents an analysis of the current situation on the steel products market. This situation is characterized by a strong influence of the pandemic - metal consumption in Russia for 7 months of 2020 decreased by 8.4% compared to the same indicator of last year, affecting all types of metal products. Nevertheless, after passing the lowest point of recession in the second quarter, there is a rapid adaptation of consumers to the changed working conditions and their efforts to restore the previous rates of work.

As Sergei Ushakov noted, the most likely scenario for the further development of the situation is a prolonged recovery of the market to the pre-crisis level, including state support: the implementation of national projects, support for mortgage lending and apartment construction, the program for renewing the Russian Railways fleet, state support for the machine-building sector and stimulating the automotive industry. ... Despite this, according to estimates, the overall level of metal consumption in Russia can reach pre-crisis indicators no earlier than mid-2021.

In this situation of new "normalcy" in the metal market, new opportunities for development may open up, in particular, through expansion in the current period of interaction between MMK and metal processors.

The dynamics of MMK's supplies to large network metal trading companies, regional traders and SMCs is characterized by consistently high volumes. In the structure of PJSC MMK's sales to traders and SMCs, about 50-60% are accounted for by independent companies. According to Sergei Ushakov, the specified proportion is optimal, since the share of sales through its own distribution network in the region of 40% or slightly higher maintains an atmosphere of healthy competition in the market. In this case, a more objective assessment of the market situation and benchmarking of its own Trading House with the strongest market participants is possible, which is necessary for further development and increased competitiveness.

Since MMK's main specialization is the production of all types of flat products, approximately 75% of the volume deliveries to metal traders and SMCs is made up of sheet products, including those with coatings. The remaining 25% is long products. In the regional context, the main volumes of supplies from MMK and Lysva Metallurgical Plant fall on the Urals (33%), which is due to the geographical location, the second place is occupied by the Central Region (24%) as the most metal-intensive region of the country.

For PJSC MMK, one of the main tasks of selling products through its own distribution network - MMK Trading House - is to promote products to end consumers with whom the manufacturer does not have direct contracts for various reasons (low-tonnage orders, the impossibility of credit) ... TD MMK has a developed warehouse network consisting of 30 sites in all leading metal-consuming regions of Russia, as well as five divisions in the Republic of Kazakhstan. Thus, TD MMK contributes to the promotion of the plant's products to small businesses, strengthening its positions in the end-user segment, as well as developing market niches, for example, in the segment of high-strength and wear-resistant rolled products. The trading network of TH MMK covers both the most metal-intensive and remote regions, has ample opportunities for export to the CIS countries and prospects for import substitution, thereby ensuring the constant promotion of PJSC MMK's products inside and outside the country. Since 2014, MMK's sales through its own Trading House have grown by 31%. The plant's sales network has repeatedly received awards at the All-Russian contests of the Russian Union of Metal Products Suppliers “The Best Metal Depot in Russia”, “The Best Service Metal Center in Russia” and “The Best Sales Network in Russia”, and is also a laureate of the “Leader of Competitive Sales” award in the category “Leader of Import Substitution”.

Speaking about the key tasks of the Magnitogorsk Metallurgical Plant in the metal trading market and SMC, Sergey Ushakov, Deputy General Director for Sales of MMK, highlighted maintaining healthy competition in the market by establishing a rational proportion of sales through its own distribution network and independent companies; timely analysis and assessment of the sales activities of the PJSC MMK Group of Companies in a constantly changing market environment for possible further adjustments; constant development and increasing the competitiveness of our own sales network in any economic and epidemiological conditions.

The 11th annual conference "Service metal centers of Russia '2020" this year is held on September 14-15 in two formats: offline (for those who come to Magnitogorsk in person) and online (for those who will watch presentations and listen to speakers in the videoconference format). The event is organized by IIS "Metal Supply and Sales" with the support of the Magnitogorsk Iron and Steel Works, the M-STEEL company and the Ural Metalworking Company. Conference participants - top managers and heads of service metal centers, enterprises - manufacturers of metal products, suppliers of raw materials for

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