MMK Shipments to Pipemakers Up

Open Joint Stock Company

Magnitogorsk Iron and Steel Works

Press Release

Magnitogorsk, Russia February 10, 2011

Magnitogorsk Iron & Steel Works (MMK) Shipments to Pipemakers Up

In 2010, MMK demonstrated almost 50% increase in metal products shipments to the Russian pipe-making industry

Last year, the company shipped over 2.376 million tons of rolled products to pipe manufacturers in Russia (48% up from 1.603 million tons in 2009). The share of tubular products in MMK's overall shipments to the domestic market climbed to 34% (33% in 2009).

MMK's major customers in the pipe-making industry are Seversky and Volzhsky pipe plants (both affiliated to TMK), Vyksa Steel Works and Almetyevsk Pipe Plant (both affiliated to OMK), and Chelyabinsk Pipe Plant.

Such a significant increase in shipments to the pipe-making sector was primarily ensured by the 5000 mm Plate Mill (estimated output 1.5 mtpy) commissioned in 2009 to produce high-quality billets for big-diameter pipes. The mill reached its full capacity in 2010 and produced its first million tons of hot-rolled plates by September 2010. Last year the mill produced 943,000 tons of commercial steel products. The Mill 5000 has strengthened MMK foothold on the Russian market of rolled metal for pipemakers and secured MMK's partaking in major oil-and-gas projects including Sakhalin-Khabarovsk-Vladivostok and Bovanenkovo-Ukhta gas mains and BTS-2 and VSTO oil pipelines.

About MMK

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. In 2010 MMK Group produced 11.4 m tons of crude steel and 10.2 m tons of commercial steel products.

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