ISKENDERUN, Turkey, Nov 7 (Reuters) - Russian steelmaker MMK's Turkish unit sees Iran and Syria, both constrained by sanctions in international trade, as promising markets, the unit's chief executive said on Wednesday.
Turkish steel mills, particularly in the Iskenderun area, have emerged as key suppliers of steel to Iran as it struggles to keep its economy afloat while its access to international banking and shipping are severely restricted by U.S. and European sanctions.
"We think Iran and Iraq are very promising markets. In the near term, Syria too, God willing, if there are political changes, because it is a very promising market both in terms of scrap, which has already been processed in large quantity, and from a sales standpoint," Vitaly Galkin told reporters on a visit to the Turkish mill in Iskenderun.
"On Iran we expect increasing sales. I think that the political situation will still allow us to enter these markets," he said, adding the unit, MMK Metalurji, had already supplied small volumes to Iran.
Iran, one of the world's top importers of billet and rebar, is under international sanctions over its nuclear programme, which it says is for electricity supply, while Western countries suspect it is aimed at developing a nuclear bomb.
MMK, the Russian acronym for Magnitogorsk Iron & Steel Works, will invest an additional $100 million in its Turkish plant to boost efficiency and take advantage of a market recovery, which it anticipates from 2013 onward, Galkin said.
"We expect the market to liven up next year and start to develop. These investments we are planning are strategically correct, because the market will pick up regardless," he said.
"By that time we will have a fairly efficient mill, which will help us be a strong competitor on this market."
It may sell a stake to a Turkish, Middle Eastern or Latin American investor to develop the mill, which will reach annual capacity of 2.3 million tonnes of steel next year, Galkin said.
He expects the plant will sell 1 million tonnes of steel this year.
He said several partnership models were under consideration and no deadline for a sale had been set.
MMK CEO Boris Dubrovsky said earlier this year the company would consider selling a 49 percent stake in MMK Metalurji provided the plant was running at its full capacity and a decent offer was made.
The Iran Project is not responsible for the content of quoted articles.
