MMK.L Regulatory News (MMK)

Open Joint Stock Company

Magnitogorsk Iron and Steel Works

Press Release

Magnitogorsk Iron & Steel Works reported record-high shipment of tube sheet

November 30, 2010, Magnitogorsk, Russian Federation

Magnitogorsk Iron & Steel Works, OJSC (MMK) shipped about 250,000 mt of rolled tubular products to domestic pipe producers in October 2010, 35% up from October 2009.

It has become the largest MMK's monthly shipment recorded in 2010 and one of the largest deliveries in the recent years. In 2008, for instance, MMK was shipping an average of 138,547 mt per month and 127,113 mt in 2009. Ten months of 2010 have brought a monthly shipment tonnage up to 196,593 mt on average.

MMK's major customers in the pipe-making industry are Seversky and Volzhsky pipe plants and Taganrog Metallurgical Works (all affiliated with OAO TMK), Chelyabinsk Pipe Rolling Plant (ChTPZ Group) and Vyksa Steel Works (OMK Group).

Russian pipe plants that ship products to oil and gas sector have always been among MMK's strategic partners. As a result, MMK has inked long-term partnership agreements with the key pipe market players. In addition to tubular products shipments, those agreements envisage taking joint efforts to introduce advanced technologies and new products designed by MMK for big-diameter pipes.

In 2008-2009, MMK annually shipped over 1.6 million mt of rolled products to pipe manufactures. In 2009, the share of hollow billets in the MMK's domestic shipments grew to 37 percent compared to 26 percent a year earlier. Following the plan to increase production for the pipe industry MMK delivered some 250,000 mt of tube sheet in October of which over 100,000 mt were rolled at the Mill 5000. It is prognosed that MMK will have shipped the total of 2.3 million mt of rolled steel products to the pipe makers by the end of 2010.

The thick-plate Mill 5000 (with annual capacity of 1.5 million mt) was commissioned at MMK in July 2009 to primarily produce high-quality hollow billets for big-diameter pipes.

About MMK

The Open Joint Stock Company MMK is among the world's largest steel producers and is one of the leaders of Russia's steel industry. The company's operations in Russia include a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of higher value added products. MMK realizes MMK-Atakas project in Turkey with annual capacity of 2.3 mln tons of flat steel. In 2009 the company produced 9.6 mln tons of crude steel and 8.8 mln tons of commercial steel products. MMK Group revenue in 2009 stood at USD 5.081 bn, EBITDA at USD 1.285 bn, profit for the period - USD 219 mln.

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