Iron ore from Severstal could be supplied to Yenakievo and Alchevsk Iron and Steel Works, which were occupied by the “DPR” and “LPR” terrorists in March, Russian Kommersant reports.
The Russian Railroads have already agreed to a 25% discount on such transportation. Iron ore raw materials will be transported from the Cherepovets-2 station in Rostov region and from Kostomuksha station in Voronezh region. The Cherepovets-2 station services Cherepovets Iron and Steel Works, while Karelksy Okatysh is situated next to the Kostomuksha station. Uspenskaya is a border station between the Russian Federation and the occupied territory of the Donetsk region.
The Russian Railroads explained that "any discount is based on economic feasibility" and can be introduced both at the request of the shipper and at the initiative of the monopoly. Discount is not tied to the volumes.
At the same time, Severstal does not comment on the introduction of discounts.
In mid-March, it was reported that the government of the Russian Federation wet with Severstal, and the company was recommended to "pay attention to a new market" for supplies of iron ore resources, in particular, to some territories of the Donetsk and Luhansk regions that were in blockade. The company denied this information, and the spokesman for Russian President Dmitry Peskov called it "untrue".
Yesterday Severstal repeated that they do not sell and do not deliver products to the occupied territory of Ukraine.
According to Mikhail Burmistrov, head of Infoline Analytics, the discount is likely to be introduced in order to create an opportunity to support the work of metal processing plants in the territory of the "DPR" and "LPR" in conditions when the railway communication with the territory controlled by Ukraine is blocked. Shipments are most likely to be carried out by unaffiliated traders. Today, traffic volumes to these stations are small - up to 19.3 thousand tons per month, while iron ore was not transported there in March.
Yenakievo and Makiivka Metinvest metallurgical plants of Rinat Akhmetov are situated in the occupied territory of Donetsk region, while Alchevsk Iron and Steel Works of the ISD group (it is believed that 50% of the group is held by nominal owners in the interests of Russian Vnesheconombank) is situated in the occupied territory of Luhansk region. Yenakievo plant (output in 2016 - 1.9 million tons of steel) and Alchevsk plants (1.4 million tons of output) need iron ore.
On April 7, the leader of the “DPR” Alexander Zakharchenko, said that "all necessary contracts have been signed", and the first raw materials for the Yenakiyevo plant should arrive this week.