This week three largest Russian metallurgical companies reported a decrease in quarterly steel production.
The Novolipetsk Iron and Steel Works (NLMK) Group in the third quarter reduced steel production by 6% compared to the second quarter, to 3.73 million tons, explaining this by the repair of blast furnace and converter production, as well as low demand for billets in export markets. In nine months, the decline accelerated to 9%, to 11.9 million tons.
Magnitogorsk Iron and Steel Works (MMK) in the third quarter increased steel production by 3.3%, to 3.19 million tons, but since the beginning of the year, production fell by 1.7%, to 9.39 million tons. The fall in the third quarter in MMK was explained by a seasonal slowdown in business activity coupled with a significant correction in world steel prices, which will put pressure on the indicators in the fourth quarter.
Severstal Group for the third quarter reduced steel production by 1%, to 3.03 million tons. The quarterly results were affected by the decrease in electric steel smelting after the sale of the long-range mill in Balakovo. Since the beginning of the year, steel production has not changed compared to the same period and amounted to 9.13 million tons.
Nevertheless, analysts expect a very successful year for Russian metallurgists, and 2020 -21. can become disruptive in terms of demand growth. This is due to the beginning of the implementation of state infrastructure projects that will increase the demand for steel in the Russian Federation by at least 3 million tons until 2021.
Severstal predicts an increase in domestic Russian demand for steel in 2019 by 4% against 0.7% last year and more than 3% in the future until 2023.