OMK and Metalloinvest sign long-term contract for supply of steel billets for production of railway wheels

United Metallurgical Company (AO OMK, Moscow) and Metalloinvest have signed a long-term contract for the supply of steel billets for the production of seamless railway wheels.

Round cast billets with a diameter of 455mm will be produced at Ural Steel, part of Metalloinvest, and will be delivered to the Vyksa Steel Works, (AO VMZ, Nizhny Novgorod region, part of OMK). According to the terms of the contract, the pricing will be based on current market indicators, taking into account global price trends. The contract lasts until the end of 2027.

Andrey Varichev, CEO of Management Company Metalloinvest, commented: "Careful study of our clients’ needs, reliability of supplies and the high quality of our iron ore and steel products lie at the heart of Metalloinvest’s client-oriented approach. This new long-term contract will strengthen our relationship with OMK, a key Metalloinvest customer."

Vladimir Markin, President of OMK, remarked at the contract signing: "This agreement with our reliable and trusted partner is the longest raw materials purchase contract in OMK’s history. We can be sure that over the next ten years, the railway wheel rolling facility at Vyksa Steel Works will be supplied with quality steel billets. This guarantees that we will be able to fulfil any orders and create wheel products in line with the most advanced modern standards and the high demands of our clients."

In 2015-2016, extensive work has been undertaken at VMZ to prepare for the transition from using its own open-hearth products to acquiring continuous casting billets from Metalloinvest in railway wheel rolling. Test batches of wheels have been produced, compulsory certification has been carried out, and repairs on modern sawing facilities are continuing. This year, a decision will be taken on the future of the open-hearth production at VMZ in accordance with the earlier announced plans to increase production efficiency and reduce its environmental impact.  

Note to editors

Ural Steel and VMZ have had a partnership relationship for over 20 years. A programme of joint initiatives to create new types of products has been ongoing since 2004. As part of this programme, Ural Steel has developed and implemented technology for the production of flat products of a K60 durability grade to create high-diameter oil and gas pipelines.

Both partners hold annual coordination meetings to analyse the quality of their products, to work out a joint programme for the creation of new products and to discuss the prospects for collaboration.

The close interaction with key customers in the form of coordination meetings is a longstanding Ural Steel policy with long-term partners of the enterprise, intended to ensure that products meet clients' demands and to guarantee required quality levels.