CIS steel output continues to fall in July

CIS crude steel production decreased in July, according to the latest worldsteel data monitored by Kallanish.

Regional output amounted to an estimated 6.4 million tonnes, down by 29% year-on-year. During the first seven months of 2022, crude steel production was 50.5mt, down 18.8% on January-July 2021.

Russian production in July is estimated to have been at 5.5mt, down by 13.2%. Cumulative steel output was 41.4mt, a decrease of 7% over the same period last year.

The second-largest producer in the region, Ukraine, saw July crude steel output drop to only 281,000 tonnes, down by 85%. The country’s year-to-date output totalled 4.82mt, down 62%.

This is the result of Ukrainian steelmaking coming to an almost complete standstill due to the Russian invasion of Ukraine since 24 February. In April, most Ukrainian steelmakers resumed production, but at low capacity utilisation and amid huge logistical problems, including for exports (see Kallanish passim).

The third-largest steel producer in the CIS over January-July was Kazakhstan with an estimated output of 2.5mt, down by 4.9% compared with the same period last year.

Belarus meanwhile saw crude steel output in the seven months reach 1.06mt, down by 21.5% on-year.

Russia remained in fifth place in the ranking of top ten global steel producers in June, worldsteel data shows. However, Ukraine dropped to 36th place.

In March, the European Council agreed to adopt the EU’s fourth round of sanctions against Russia (see Kallanish passim), thereby banning imports from Russia of those steel products currently under safeguard measures. The ban is expected to impact some €3.3 billion ($3.38 billion) of steel exports from Russia.

The safeguard quotas assigned to Russia and Belarus have been redistributed among other nations. There is hope among EU steel buyers that, with Ukrainian steel capacity gradually coming back on line, imports from this country could pick up again. In May, the EU and US removed tariffs on Ukrainian steel for one year.

Svetoslav Abrossimov Bulgaria