However some reassuringprocessesarealso
takingplace in theRussian industry.TheRussian
governmentkeeps investinga lot in thedefense
industry.According toTheMinistryof Industryand
Tradedefenseproductsoutput increased10% in
2013.Most likely, the same levelwill bemaintained
in2014.However, the industryusesmainly special
steelsandalloys,notordinary rolledproducts.
Theautomotive industryandhomeappliances
manufacturersmay in thenear future increase
consumptionofdomestic steelsdue togrowing
localization. Following the leadingautomotive
corporations,manufacturersof sparepartsare
entering theRussianmarket.Currently, twooutof
elevencar factoriesbuilt inRussiaby international
companieshaveno less than50% localization
(Avtoframos inMoscowandVolkswagen inKaluga),
however the localization share tends togrow.
According to I.Khoroshy, consumptionof various
typesof steelproducts in theRussianautomotive
industry in2013dropped4—11%against2012.The
drop inconsumptionwillnotbe fullyovercome
in2014.Aftergrowth inQ1, 2013domesticprices
forflats fell topickup slightlyagain inautumn.
The largestRussian steelproducersofferedhot-
rolledcoilsat17.5—19.5k rubles/tEXW (tobe
supplied to theCentralFederalRegionofRussia).
Reinforcedbarsare$10—30/tmoreexpensive in the
internationalmarket compared tohot rolledflatson
theaveragewhile inRussia thedifferencemay reach
$50/t evenmore.
Due to fulfillmentof anumberofprojects
includingNorthStream investment activity in the
Russianoil andgas industrydroppeda little in2013.
HoweverSouthStream followedby layingnewgas
pipelines fromRussia toChinawill be launched in
2014. Inaddition to that anumberof largeprojects
will be implementedbyTransneft thisyear.All this
will stirupdemand foroil andgaspipes.
Operation in thedomesticmarket requires from
Russian steel companiesmoreeffortscompared to
exports. Semisaccounted for52.5% in theRussia’s
total exports in2013, 63%of themare soldoutside
theCIS.Althoughdemand for rolledproducts
forconstructioncurrentlygrows inRussia, other
segments includingcoatedflats, sheets for the
automotive industry, special steelsandother
highvalueaddedproductsdonot lagbehind.
Steelproductsconsumptionand thedemand
structurewill in the long termdependon thepace
ofmodernizationof thenational economy. Steel
consumptionpercapita inRussiaexceeded300kg
in2013,which isa littlemore than in theUSA, but
1.3—1.6 times less than in Japanand industrially
developedEuropeancountries.Economicupswing
started in themiddleof the lastdecadedue to
increase inenergyproductsexportsalmostfinished
requiring searching fornew sources.
Due to thecurrent economicpolicywhich
definitelyneeds tobechanged, rolled stockdemand
isunlikely to increasemore than3-4%,with
pricesgrowing5—10%.Russiaundoubtedlyhas
abigpotential of growthbyexpanding industrial
productionand implementing large-scale
infrastructure-buildingprojects, however it should
beusedproperly.
L
37
Special Issue 2014
Metal Supply&Sales
