Kazakhstan steel mill, ArcelorMittal Temirtau were partly suspended due to pipeline explosion last week, and rolling production line and related facility were damaged. Particular blast furnace plants will be shut down for three weeks, and expected to resume normal operations after several months.

At present, only one of the four blast furnaces is under normal operation, however both No.1 converter and No. 3 blast furnace were routinely repaired before explosion affair.

ArcelorMittal Temirtau is the only hot-rolled steelmaker in Kazakhstan and the largest import source for Russia. The suspension might directly benefit for MMK Steel who was very close to Kazakhstan, but market participants have estimated that shutdown effect should be reflected in market after two weeks.

According to statistics, Russia imported total of 243,000 tons of hot-rolled coil from January to July this year, of which more than 170,000 tons were from Kazakhstan, accounting 72% of total imports. Domestic steel demand in Russia fell due to seasonal factors, construction projects could not be carried out in severe winter, and prices began to fall since this October.

However, after explosion affair of Temirtau, Russian steel mills might shift their sales focus to domestic market and reduce export supply, then expected export price stop falling.