CIS steel output continues to fall in May

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

Regional output amounted to an estimated 7.4 million tonnes, down by 19% year-on-year. During the first five months of 2022, crude steel production was 38.4mt, down 13.1% on January-May 2021.

Russian production in May is estimated to have been at 6.4mt, down by 1.4%. Cumulative steel output was 23.1mt, a decrease of 2.3% over the same period last year.

The second-largest producer in the region, Ukraine, saw May crude steel output drop to only 308,000 tonnes, down by 83%. The country’s year-to-date output totalled 4.2mt, down 52.8%.

This is the result of Ukrainian steelmaking coming to an almost complete standstill due to the Russian invasion of Ukraine on 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-May was Kazakhstan with an estimated output of 1.83mt, up 0.5% compared with the same period last year.

Belarus, the fourth-largest producer, saw crude steel output in the five months reach 755,000t, down by 19.6% on-year.

Russia remained in fifth place in the ranking of top ten global steel producers in May, worldsteel data shows. However, Ukraine dropped to 18th 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 ($3.52 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 removed tariffs on Ukrainian steel for one year.

Svetoslav Abrossimov Bulgaria