Russian mining and metals company Mechel said it signed a long-term contract for the supply of coke to the Serbian unit of Chinese steelmaker Hesteel.
Under the terms of the deal, the Moscow-based coke and gas plant of Mechel will supply 120,000 tonnes of coke to Hesteel Serbia in 2018, the Russian company said in a statement on Thursday.
Prices will be determined on a quarterly basis following negotiations, Mechel said.
Mechel is interested in the Serbian market, due to the stable demand for coke, the CEO of the Russian company, Pavel Shtark, said.
“In the future, we plan to increase our supplies to this key client in the Balkans,” Shtark said.
Earlier this year, several trial batches of metallurgical coke were shipped to HBIS Group Serbia Iron & Steel, a subsidiary of China’s steelmaker Hebei Iron & Steel Group, or Hesteel, Mechel said.
The Chinese group officially took over the management and ownership of Serbian steel mill Zelezara Smederevo in July 2016. In April 2016, Serbia’s government agreed to sell the steel mill to Hesteel, after the Chinese investor submitted a binding offer to buy all 98 property units of Zelezara Smederevo for a total of 46 million euro ($54.5 million).
The chairperson of Hesteel, Yu Yong, said earlier this month he expects the revenue of Zelezara Smederevo to rise to $1 billion next year from $750 million in 2017 and $433 million in 2016.