Memo from Moscow
Steel News from Russia and Ukraine
Russian Stainless Steel Sector, October 2008
In 2007 total world crude steel production was about 1.35 billion tonnes. From this total, some 7.5% of total volume ( ~ 101 mt) and some 20% of total value was special steel. Special steel includes not only stainless steel, but also engineering, tool, bearing, precision, heat resist and specialized alloyed steels. Special steel market size is often a good indicator of a country's stage of technical development.
According to the Russian Special Steel Association, Russian 2007 production share for special steel was ~4.5%. Russia’s production levels for finished special steel rolled products in 2007 were :
- Long alloyed structural steel 2,164 kt;
- Pipe semis 933 kt;
- Low alloyed structural steel 982 kt;
- Reinforcing-bar 947 kt;
- Other rolled stainless steel ~140 kt.
There are 16 main stainless steel producers in Russia. Their production shares are Mechel, Chelybinsk 34.5%, Zlatoust 16.7%, Izhstal 16.3%, Electrostal 8.2%, Red October 7.7%, Serp i Molot 3.7%, Byeloretsk 2%), OEMK and some other small producers, <1% each. The Russian stainless steel production structure in 2007 was flat products 52,000 t, long products 55,000 t, pipes 18,000 t, wire 6,000 t and forgings 5,000 tonnes.
With Russian 2007 stainless steel production at ~140,000 tonnes (incl. wire and pipes), total imports of stainless flat and long products in 2007 reached 165,000 t. Flat product consumption in 2007 was 148,000 tonnes. The main suppliers of imported flat stainless steel to Russia are China (23,000 t), EU (15,000 t), Brazil (13,000 t), Taiwan (13,000 t) and South Korea (11,000 t). March 2007 saw the introduction in Russia of stainless steel antidumping duties for EU supply of Euro 840/tonne. EU stainless supplies to Russia thus fell from 48,000 tonnes flat products in 2006 to ~15,000 tonnes in 2007, with practically all of the reduced EU supply covered by deliveries from China, Brazil and Taiwan.
The main stainless steel flat rolled producer is Chelybinsky (Mechel) with total production volume at about 40,000 tonnes. The principal long stainless steel producers include Zlatoust with 18,000 t; Izhstal with 15,000 t, Electrostal 7,500 t, Red October ~7,000 t and Chelyabinsk who produce ~4,500 tonnes.
Industry observers consider that Russian consumption of stainless steel rolled products will grow at ~8% per annum over the medium term, reaching 310,000 tonnes in 2010. Consumption of long products will grow from 70,000 tonnes in 2007 up to 82,000 tonnes in 2010.
Readers should note that Chelyabinsk and Izhsteel have their own raw-material base for production of special steels, allowing optimization of costs but meaning that these firms typically deal with large-volume orders only. Krasny October (Red October, Volgograd) has a favourable geographical position, but manufacture of long products will not offer the same volume growth opportunities that can be expected in flat stainless steel products in the coming years. Electrostal (Moscow) has a broad assortment of production, is a leading producer and enjoys good geographical position; but concentrates on unique orders for specialist stainless markets. Zlatoust Metallurgical Plant [ZMS] is better equipped to produce small-tonnage orders including some unique brands of steels and alloys as well as cold-drawn bar, and special surface finishes. Zlatoust is also the only producer in Russia and in Europe of large hollow ingots (up to 3 meters) made from difficult-to-form alloys and stainless steels. Large distances to its main steel consumers and comparatively high costs of metal rolling on inefficient, dated plant and equipment do however disadvantage ZMS profitability quite significantly.
| 01-Sep-08 | 2007 Russian steel industry review |
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