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. Last Updated: 07/27/2016

MMK Plans 42% Rise in Output

Magnitogorsk Metal & Steel Works, or MMK, will increase production by 18.7 percent this month and by as much as 42 percent in February compared to December after "demand has revived," Interfax reported Monday, citing company chairman Viktor Rashnikov.

"Metals traders have run out of their stocks," Rashnikov said at an industry meeting in Chelyabinsk on Saturday.

MMK produced 421,000 tons of steel in December, working at half production capacity as demand faded and metals prices plummeted last year.

MMK has been unprofitable for the last three months, Rashnikov said, adding that he expected his company to break even in March.

Rashnikov gave details to previously announced cuts to MMK's investment program. "We will decrease the program from the planned 40 billion rubles to 15 billion rubles," he said.

Among those also attending Saturday's meeting were Mechel chief executive Igor Zyuzin, TMK chairman Dmitry Pumpyansky, Surgutneftegaz chief executive Vladimir Bogdanov and LUKoil vice president Sergei Kukura. It was chaired by the president's envoy to the Urals Federal District, Nikolai Vinnichenko.

The country's biggest metals, pipe and machine producers have asked the government to assist debt-ridden state-run companies, Rashnikov said.

"Our main debtors are companies with direct or indirect state participation," Rashnikov said, adding that if Gazprom paid the 10 billion rubles it owed pipe producers, "the whole production chain would be in good order."

Gazprom owes 6 billion rubles to TMK, Pumpyansky said at the meeting.

Gazprom spokesman Andrei Chernykh was not available for comment Monday. MMK spokeswoman Yelena Azovtseva did not reply to calls to her cell phone or e-mails.

Meeting participants also called on the government to guarantee their obligations to banks, freeze tariffs on rail transportation and increase state orders, Interfax reported.