Alexei Mordashov tries to forge “steel OPEC” to balance demand and supply

Severstal’s owner Alexei Mordashov has offered the world leadingsteel companies to limit their production to meet the crisis of overproduction. The scheme of production volumes control exists in the oil industry within the Organization of Petroleum Exporting Countries (OPEC); a similar agreement existed in the potash industry until recently. But, according to analysts, Chinese companies will sabotage “the steel OPEC”.

Severstal intends to offer to the world's large steel companies an agreement on the limitation of steel smelting volumes and stoppage of surplus production, the company’s General Director and the main owner Alexei Mordashov stated to the Financial Times yesterday. He cited as an example measures, assumed by the largest aluminium producers – in the EU, USA, Russia, Canada, Australia and Norway – in 1994. Then they agreed to stop surplus capacities and the world aluminium production fell by 6%. Yesterday, within the Investor Day, Mordashov specified that negotiations with Heads of steel companies should be started as soon as possible. According to him, the World Steel Association, where Alexei Mordashov was chairman in 2012-2013, or the Organization for Economic Cooperation and Development can be the venue for such agreement.