Companies were able to redirect supplies to the domestic market, where steel is needed for construction projects, despite difficulties with exports. The lower ruble is giving the steel industry a boost, but export prospects are not very promising.
Russia's yearly steel production rose by 1.9% in April, reaching 6.4 million tons. Results for the first four months of the year show a 0.6% drop, to 25.1 million tons, overall.
It is estimated that the capacity utilization of ferrous metallurgy in Russia in April at 94%, which is three percentage points higher than in March.
The capacity utilization of metallurgical companies continues to increase. With a design capacity of 1.2 million tons per year, blast furnace No. 4 was launched by MMK in early May after being shut down for overhaul in December. After repairs last year, Ural Steel began operating a blast furnace with a 1.4 million ton capacity in early March. The average daily production of pig iron at Cherepovets Iron and Steel Works grew by 23% in April compared to March.
Prices for hot-rolled steel FOB the Black Sea may drop as low as $550. Prior to the rainy season, domestic demand is also declining in India, and business is very slow in Europe. Hot-rolled steel's price might go considerably below $500 FOB.
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