NLMK.L Regulatory News (NLMK)

NLMK upgrades its transformer steel facilities

Production has commenced at a new facility producing electric insulation coating for transformer steel at NLMK's main site in Lipetsk. The launch of the 60,000 tpa line is a further step in designing a process chain for manufacturing a new steel product type in Russia in 2011 - nanostructured high-permeability transformer steel ('HPTS').

The capacity of this new facility exceeds that of NLMK's existing electric insulation coating lines by 30%. The line's technical parameters allow for the metal heating and cooling rates required for HPTS production.

Refurbishment of a normalization line for hot flats and the construction of a new reversing mill with unique process capabilities are nearing completion at the Lipetsk site. The commissioning of these facilities scheduled for the end of this year will make it possible to produce HPTS at the main site in Lipetsk. The planned production capacity for this product will be around 60,000 tpa.

HPTS, designed for the electrical industry, has an especially low rate of magnetic loss and complies with the best available technologies (BAT) standards. Its application in power transformers will reduce specific losses of electric energy by 10-15%. With a steadily high demand for high-permeability transformer steel in the global market, the company will be able to strengthen its position in the global transformer steel market and ensure stable sales for this product.

Investments into the construction of the electric insulation coating line for transformer steel totaled about RUR 1.5 bln (~USD 50 mln).

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NLMK Group is one of the global leaders in electrical transformer steel production. Production capacities of the Company at the main site in Lipetsk and in its Yekaterinburg based subsidiary VIZ-Stal exceed 340,000 tpa.