Severstal and Mitsui to Set Up Auto Steel Service Center in Russia

Japan’s Mitsui & Co., Ltd. has signed a joint venture agreement with OAO Severstal to establish a new steel service center for automobile steel in Leningrad Oblast, close to St. Petersburg, the second largest city in the Russian Federation. The JV is expected to commence operations in the middle of 2013. The annual capacity of this service center will be 170,000 tonnes. With this agreement, Mitsui will be the first Japanese trading company to participate in a steel service center in Russia.

Russia's automotive sales temporarily declined after the world financial crisis. However, they are expected to increase to 3 million vehicles in 2016, making Russia's automotive market the 7th largest in the world. Many foreign car manufacturers are located in the Russian northwest area, and with the Russian government promoting local sourcing, demand for steel processing is anticipated to grow.