Impact of credit crisis on Russian steelmaking production
According to Rosstat, total industrial production in Russia for January to August 2009 dropped by ~14% in comparison with the 2008 level. Production of machinery and equipment fell by ~33%, of transport units by ~41%, and of Russian-made passenger cars by ~63%. The drop in Russian crude steel production for the 9 months of 2009 at about 25% is however much less than that in the USA (about 50%) or the EU (about 35%). However - it is much worse than in China and India, which showed growth of steel output across the period. The big Russian steel producers today predict full year 2009 production levels at about 80% of the 2008 level, only.
Due to the economic crisis, debts of the Russian metallurgical holdings have mushroomed. Rusal's debt currently stands at $16.8 bn; of this, some $7.4 bn is owed to foreign banks. The partnership debt of EvrazGroup is around $8.5 bn, Severstal debt is around $4.9 bn, and that of Metalloinvest is about $5.9 bn. Currently, all the Holdings are trying to restructure these debts; both externally with Russian Government support, as well as internally through efficiencies and cost management.
Investment activity in the Russian steel sector has reduced considerably during the recent months. According to the Ministry of Industry and Trade, the total value of investment in the Russian steel sector in 2009 will reach about 100 bn Rubles (much less therefore than the planned 2009 value of 150 bn Rubles - as set out according to the Strategic Development Plan for the Russian steel industry). The Ministry's forecast for 2010 investment is about 120 bn Rubles. But according to the Ministry, this latest forecast rcognises that not all large or strategic investment projects in steel will go ahead as originally planned. Nonetheless, looking forward constructively:
The Russian steel industry has good potential for development of its steel industry and associated metals processing. Even now some world-known market players are gaining top positions in Russian industry: annual turnovers in the Russia market of such leading companies as Siemens VAI and SMS Siemag Group reportedly exceed $1 billion each. Danieli and the Tenova Group are also very active indeed in Russian Metallurgy. The Russian National Institute for metallurgical equipment VNIIMETMASH and METALLURGMASH Holding are also very busy with project plans for development and further modernization of the Russian steel sector.
|01-Aug-09||Steel in Byelorussia|
|01-Jul-09||Steel modernisation projects in Russia|
|01-Jun-09||Kazakhstan steel industry review|
|01-Apr-09||Russian steel crisis - raw materials|
|01-Mar-09||Ukraine steelmaking raw materials|
|01-Feb-09||2008 year end review|
|01-Jan-09||Impact of the credit crisis|
|01-Oct-08||Stainless steel sector in Russia|
|01-Sep-08||2007 Russian steel industry review|
Memo from Moscow is a free regular steel industry news report provided for visitors to www.steelonthenet.com with the
compliments of Metals Consulting International Limited.
Researched by MCI's specialist steel team and published monthly, the report brings site visitors regular reports on topics such as Russian steel consumption, production, modernisation and investment, international trade, steelmaking in Ukraine, CIS steel prices, iron ore and metallurgical coal supply etc.
If there is a specialist steel-related topic in Russia or Ukraine that you wish our CIS team to brief you on, please e-mail us at firstname.lastname@example.org or follow this link for further information about MCI.