LME registers Evraz as approved steel brand

Russian steelmaker Evraz (HK1q.L: Quote, Profile, Research) became the first major steelmaker to register for the LME's approved steel brands, allowing the delivery of its products against the exchange's billet contracts.
"We approved it (Evraz) yesterday," a spokeswoman at the London Metal Exchange said on Thursday. Evraz also confirmed the approval, without giving further information.
According to the LME's web site, steel can only be used to satisfy an outstanding contract if the billet is from an authorised brand listed producer.
Most steel majors in the $800 billion industry have not welcomed steel futures contracts around the world, arguing that futures would distort already volatile steel prices. Most interest so far has been from the mini-mills.
Evraz's move was welcomed by steel traders who use the LME contracts.
"It is a very important indication that major steel firms, beside mini-mills, are getting involved with the billet contract," said Abe Ulusal, steel futures broker at Mitsui Bussan Commodities.
The LME has nearly 40 approved brands in steel billet listed for its Mediterranean and Far East contracts, where the turnover had reached 1 million tonnes in mid-December 2008.Russian steelmaker, Severstal (CHMK.MM: Quote, Profile, Research), was the first major producer to publicly support the contract, saying it could be beneficial for the industry.
But Severstal said it did not plan to use the contracts, joining the world's biggest steelmaker ArcelorMittal (ISPA.AS: Quote, Profile, Research), which has turned its back on the LME's Mediterranean and Far East contracts.
Germany's biggest steelmaker Thyssenkrupp (TKAG.DE: Quote, Profile, Research) said it used the contracts as a trial, but that did not change its official stance of opposing the futures.
The LME release obtained by Reuters showed almost 12 million tonnes of Evraz's steel products in four different plants were registered as approved brand.
The company produced 17.7 million tonnes of crude steel in 2008 while the merchant trade stands around 35 million tonnes annually.