Two Russian rebar mills to restart production

Two idle Russian longs mills are set to restart using billet from the self-proclaimed Donetsk and Lugansk people's republics, according to market participants.

The mills will be restarting under Russian company Gaz-Alliance, which now operates a number of assets, including Ukrainian integrated steelmaker ISD's RGMK trading company, the Revyakinsky steelworks (RMZ) in the Tula region and the Stavstal mill in Stavropolye.

Gaz-Alliance will supply the businesses with material from mills it is operating in the Ukrainian breakaway regions. These include ISD's Alchevsk steelworks and Metinvest's Yenakiive and Makiivka steelworks, according to market participants. Gaz-Alliance is under US sanctions for exports of coal from the Lugansk People's Republic (LDNR) since January 2018.

RMZ, which has a nameplate capacity of 500,000 t/yr of finished steel products, went bankrupt and was then taken over by RGMK in 2016. Its steel shipments totalled 23,000t in 2017. The last took place in September last year, when it sent 5,400t of long products to several customers, after which the mill was idled.

Stavstal is capable of producing 500,000 t/yr of billet and 350,000 t/yr of rebar. The mill was idled because of a capital shortage at the beginning of 2017, soon after the launch of its electric arc furnace shop in September 2016.

Billet shipments from Lugansk to RMZ have already started, according to market participants, which should ease the Russian domestic rebar deficit. Local prices reached a two-year high recently on the back of the shortage of 8-12mm diameter product.

Gaz-Alliance could not be reached for comment.