The Russian Steel Association, which brings together the largest producers of ferrous metals and pipes in Russia , raised its forecast for steel consumption in Russia in 2019 to 4%, which is higher than the June forecast of 2%. This was announced by the Executive Director of the Russian Steel Association Alexey Sentyurin at a meeting of the Coordinating Council for Industrial Policy in the Metallurgical Complex under the Ministry of Industry and Trade of the Russian Federation on November 12, 2019, chaired by the State Secretary - Deputy Minister of Industry and Trade of the Russian Federation Viktor Evtukhov. p>
In 2018, the main drivers of growth in metal consumption were the hardware industry (+ 12%), the automotive industry (+ 11%), and machine building (+ 10%). The pipe industry reduced metal consumption by 2%, the construction sector showed zero growth. The revival of domestic demand in 2019 was noted at the end of the 3rd quarter (+ 8.6%), mainly due to positive changes in the legislative regulation of the construction industry and the introduction of escrow accounts from July 1, 2019
Spread between raw materials (scrap) and finished products catastrophically approached during the year, and in September 2019 this led to unprofitable low-margin chains at a number of metallurgical enterprises. This creates an additional unfavorable trend in the long products market.
Alexey Sentyurin noted that in the first 9 months of 2019, there was a significant decrease in export supplies of rolled metal - by 13% - with a one-time increase in the export of semi-finished products by 3% to a record in this century, the share in exports is at 56%. The main reason for the decline in exports is the global problem of overcapacity and the intensification of the use of trade barriers.
Marina Ivanova, Vice-President of the Russian Steel Association, provided detailed data on the trade barriers in force in the world. The sector is subject to the largest number of trade protection measures in the world, more than 400 restrictions in force at the end of 2018. Each WTO member has almost 3 trade restrictions on steel and metal products, while the previously introduced barriers (measures) are systematically extended.
Strengthening of protectionism naturally occurs during periods of unfavorable market. The current wave of trade barriers in the steel sector was further triggered by the introduction of duties in the United States under Article 232. This led to a significant narrowing of the export opportunities of Russian steel companies: in 2018, 7 new restrictive measures were introduced, and as of September 2019, 4 additional restrictions were introduced, 4 more were extended, 5 new investigations were started, following the results of which new restrictions are expected.
Together with the State Secretary - Deputy Minister of Industry and Trade of the Russian Federation Viktor Yevtukhov, the participants of the Coordination Council discussed possible actions of the state authorities in order to ensure effective protection of Russian steel producers in foreign markets and the EAEU market.
As part of the meeting of the Coordinating Council, together with the Ministry of Industry and Trade of Russia, the meeting participants also discussed external and internal factors that hinder the development of the industry and outlined the main steps to solve them.
An abbreviated version of the Association's presentation can be found by link p> The Association of Ferrous Metallurgy Enterprises "Russian Steel" unites the largest producers of metallurgical products in Russia. The Association was founded in 2001 by the leading metallurgical companies of Russia to coordinate efforts to protect the interests of Russian metallurgists and to implement joint projects that are not of a commercial nature. The companies that are members of the Association produce 98% of Russian pig iron, about 90% of steel and Russian rolled stock, about 60% of pipes, as well as a significant share of raw materials for the metallurgical industry.
The Association members are currently: EvrazHolding, NLMK PJSC, MMK PJSC, OEMK AO (Metalloinvest Management Company LLC), Mechel PAO, OMK AO, Severstal PAO, TMK PJSC and PMH Management Company LLC .
