The Russian government requirement to take payments for all exports in roubles will lead to a loss in market share, said NLMK owner Vladimir Lisin in comments confirmed to Kallanish.
“The idea to sell metal products for roubles will lead to the fact that NLMK will be thrown out of international markets,” Lisin said in an interview with Kommersant. “The consequences of expanding the list of goods that can be sold to other countries for roubles have not been analysed in full.”
According to him, NLMK fought hard for export markets over decades. “We have built relationships with thousands of clients in 70 countries and it is difficult to imagine what can convince our buyers to switch to rouble settlements and bear currency risks,” he said. “Logistical problems have already complicated the delivery of products to the consumer.”
Lisin noted that many measures are being taken “too quickly”, adding: “Their consequences have not been fully analysed and it seems to me that speed should give way to accuracy, so that the consequences do not turn out to be devastating for the domestic industry, which employs millions of people.”
“Fixing prices for steel products in the domestic market and abandoning formula pricing based on market indices does not make life easier for business,” Lisin observed. “We see, for example, that in recent weeks, suppliers of materials, equipment, and components have raised prices many times over. Under such conditions, the freezing of prices for final products will lead to the fact that production will simply stop due to losses.”
On Tuesday, Lisin became the richest Russian, according to Forbes, with a fortune estimated at $18.4 billion. However, it was reduced by $7.8 billion on-year.
NLMK also announced that S&P, Moody’s and Fitch have withdrawn the company’s credit ratings. These decisions were initiated by the rating agencies in light of the requirements set out by EU regulators.
NLMK, with its flagship steelworks in Russia and a number of re-rolling flat product assets in the EU and US, is not under sanctions after the Russian invasion of Ukraine and neither are its regularly exported products, mainly slab and pig iron.
Svetoslav Abrossimov Bulgaria
