Russian steel output rebounds in March
Russian steelmakers produced 5.4 million tonnes of non-alloy semi-finished steel in March, up by 13% on-year and 12.1% on-month, according to national statistical service Rosstat data monitored by Kallanish.
In February, output is estimated to have reached 4.96mt, up by 5.3% on-year (see Kallanish passim). In January-March steel production was more by 15.9% y-o-y at 15.7mt.
However, March’s finished steel output was down by 4.6% on-year at 1.34mt. Pipe production also decreased 4.9% to 421,670t.
In 2020, Russian crude steel production had reached 73.4mt, up 2.6% over 2019.
Fitch Ratings forecasts Russian demand in 2021 to increase by 4-6% on-year. This comes amid growth in construction activity thanks to government support, the implementation of infrastructure investment projects, and the gradual recovery of the automotive industry.
Strong cost positions have allowed major Russian flat steelmakers like Severstal, NLMK and MMK to maintain high utilisation rates throughout the Covid-19 pandemic and generate sufficient cash flows to fund large capital expenditure, the agency observes.
ING bank says that “reduced global demand for oil, which has led to Russia's OPEC+ commitments and is resulting in an ongoing circa 10% on-year drop in oil output” is a risk factor that could further hamper any industrial recovery in Russia.
“The metals sector is showing uneven performance in recent months, suggesting high dependence on the volatile global mood,” ING adds.
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