Since the beginning of the year, the NLMK Group has reduced production volumes by approximately 1 million tons compared to the benchmarks laid down, Chairman of the Board of Directors of the company Vladimir Lisin said at the congress of the regional union of industrialists and entrepreneurs in Lipetsk.
“Now it is already July - in fact, only we have lost a million tons. And this means, as we predicted, all Russian metallurgy will lose from 30% to 50%,” he said.
According to him, it is now difficult to imagine the implementation of long-term investment programs by metallurgists, for the implementation of which it is necessary to clearly understand the plans for production volumes and types of products.
“It is clear that the implementation of investment programs has become much more complicated. Of course, we will bring what we had to the end. Maybe with some delay, because there are delays in the delivery of equipment. And then the question arises, what will be the possibility of replacing it, reproducing it within the country,” Lisin added.
Commenting on the situation with demand in the domestic market, he noted that there was a “decrease in activity”, while recalling the closure of export markets for Russian steelmakers, which accounted for approximately 40% of total production, and low profitability when shipped to countries ATP.
“Part of exports has been closed for us, the existing Asian destinations and China are quite difficult in terms of logistics and freight costs. Chinese, for example, steel at a price today is almost at the level of the cost of Russian steel,” said the head of NLMK.
According to him, on average, about 40% of metal products manufactured in Russia remain unsold.
“Let's say that 10 or 15 percent will somehow settle down, even 50% of these 40%. And where does the rest go? The domestic market has never consumed so much. Accordingly, in the domestic market, among other things, prices fell, including due to a large surplus,” he added.
Recall that in Asia are closely watching the growth in the supply of rolled steel from Russia at low prices. Taiwan's China Steel Corp. stated that it is closely following the offers of hot-rolled products from Russia and is ready to take steps "against unfair behavior in trade" if its Chinese customers switch to steel supplies from Russia.