Russia steelmakers face backlash as exports, prices surge

日期:2015-01-31 18:26:22
中国钢材

Russian steelmakers are facing a backlash from industrial consumers who are battling high internal steel prices and are lobbying the government to introduce quotas on exports.

An industry source told Reuters that following complaints from steel consumers such as carmakers and builders, Russia’s anti-monopoly authorities will look into the high steel prices.

Domestic prices for hot rolled steel sheet have risen by some 25 percent since September to 29,330 roubles per tonne, according to Metal Bulletin, spurred by a 40 percent plunge in the rouble versus the dollar last year.

But some steelmakers, especially those with high dollar-denominated debt, are struggling. They have held talks with industry ministry officials this week to rebuff demands that they curb steel prices.

Last year, Russia took steps to restrict grain exports in an attempt to cool prices and tackle a financial crisis linked to plunging oil prices and Western sanctions.

“Any market control measures, including limiting exports will lead to production cuts, worsening debt management, decreasing investments and finally, a further economic recession,” said Oleg Bagrin, president of top Russian steelmaker NLMK.

Russian steel exports rose 25 percent in the fourth quarter of 2014 to 5.5 million tonnes, the Association of Sea Trade Ports says, spurred on by the rouble plunge.

Steel exports are expected to rise further this year as the rouble rout continues.

Exports have offered steelmakers with overseas exposure a lifeline. NLMK for example expects 2014 core earnings to be their highest in four years on boosted exports.

Steel consumers, by contrast, are struggling, with Russia’s economy expected to shrink 3 to 5 percent this year. Still, analysts say authorities are unlikely to try to curb steel prices via export quotas.

“There’s no point, there’s no way all the Russian steel produced here can be consumed,” an industry expert said.

One thing that could curb Russian exports, however, is anti-dumping duties. Last year, the United States scrapped a deal sheltering Russian steelmakers from import duties as high as 184.56 percent.

Russia is the world’s sixth largest steel exporter. Its move to raise exports could weigh further on global steel prices ST-CRU-IDX, currently languishing at five-year lows.

“We expect 2015 to be far more challenging (for Russian steelmakers),” said Sberbank. “The slowdown in local demand will hamper domestic price growth. Production volumes could also come under pressure should the companies export capacity be affected by rising protectionism.”

Source: Reuters (Additional reporting by Andrey Kuzim, editing by David Evans)

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