Market review

Russian steel market

Russia’s economy embarked on a growth path in 2017 with GDP increasing by 1.5%. Positive trends in housing statistics and a broader economic recovery supported demand for steel products, which rose by 5% to 38.1 million tonnes. The demand for long steel climbed by 7%, 5% for flat steel and 2% for tubular products. In the railway segment, the demand for wheels surged by 96% due to the new cycle in railcar construction, and the rail consumption improved by 10%. In construction steel, the beam market grew by 6%, while demand for rebar and structural products was up a respective 3% and 5%.

Russian export volumes were in line with the previous year’s figure of 24.2 million tonnes, mainly driven by the combination of a stronger rouble and solid domestic demand. Total crude steel production in Russia rose by 2% to 71.6 million tonnes.

In 2017, Russian steel prices rode the wave of stronger global benchmarks and domestic demand. The CPT Moscow rebar price averaged US$444 per tonne, up 15% from US$387 per tonne in 2016. The price for channels performed even better, growing by 49% to US$622 per tonne. Hot-rolled coil averaged US$563 per tonne CPT Moscow, up 31% from US$431 per tonne in 2016. Plates averaged US$555 per tonne, up 31% from US$423 per tonne in 2016.

Russian steel consumption by product type, mt
Russian steel prices, US$/t

Other steel markets

In Ukraine, domestic steel consumption rose by 5% to 4.7 million tonnes in 2017, up from 4.5 million tonnes in 2016, due to the continuing stabilization of the political situation and economy. Export volumes dropped by 13% to 15.6 million tonnes due to a temporary shutdown of certain steel plants in the beginning of 2017.

Kazakh steel consumption improved by 18% to 3.0 million tonnes in 2016, compared with 2.5 million tonnes in 2016, due to the weak performance in 2016 and general growth in the construction sector in 2017. Steel product exports climbed by 11% to 3.4 million tonnes amid rising global steel prices and growing demand in Russia.