Magnitogorsk Sees First-Quarter Sales of $850 Million

OAO Magnitogorsk Iron & Steel, Russia’s third-largest steelmaker, expects first-quarter sales of $850 million, according to Oleg Fedonin, a vice president.

Rising demand in February and a 40 percent drop in the cost of iron ore turned Magnitogorsk profitable in the month, earlier than it expected, Fedonin said on a conference call today. The steelmaker is buying ore concentrate at $50 a metric ton and washed coking coal at 1,600 rubles ($48) a ton, he said.

Magnitogorsk, based in the Ural Mountains city of the same name, expects an 18 percent margin for earnings before interest, tax, depreciation and amortization over sales in 2009, he said. Metal-product output will probably average between 600,000 and 700,000 tons a month, Fedonin said.

Production costs for slabs, a basic steel product, fell to $201 a ton in the first quarter, he said.

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