Mechel's Chelyabinsk plant to boost stainless steel output 650% by 2011

The Mechel (RTS: MTLR) group plans to increase production of hot-and cold-rolled stainless steel products at its Chelyabinsk Iron & Steel Plant (RTS: CHMK) by 650% by 2011, to 300,000 tonnes per year. The group's strategic marketing chief, Alexander Malanichev Wednesday at the Stainless Russia-2007 forum that meeting these targets would enable Mechel to increase its share of the hot-rolled products market to 80% in 2011 from 39% in 2006, and its share of the cold-rolled market to 50% from 15%.

The Chelyabinsk plant now produces 15,000 tonnes of cold-rolled and 25,000 tonnes of hot-rolled products per year, he said. The plans call for expanding production to respectively 200,000 tonnes and 100,000 tonnes. Malanichev said these plans would be realized by modernizing production facilities, expanding the product line and improving quality while reducing costs. He did not say how much the company would spend on updates at the plant, as the group's investment program to 2011 has not been approved yet. It will be approved by the end of the first half, he added.

Russia on March 20 imposed a three-year antidumping duty on imports of stainless steel from the European Union containing 2.5% or more nickel. The duty is 840 euros per tonne of steel. Analysts reckon the duty will enable domestic producers to increase stainless steel production. Chelyabinsk Iron & Steel Plant is Russia's biggest producer of stainless steel roll.