Russian Steel cuts consumption growth forecast

Russian Steel has revised down to 1% its 2018 Russian steel consumption growth forecast from 2.6% in June. This is considerably down on the 5.1% confirmed growth in 2017, which brought to an end three consecutive years of contraction, the association says in a note seen by Kallanish.

Both 2016 and 2017 saw the heavy engineering industry driving consumption, with a 15% increase in 2016 and 26% increase in 2017. Steel consumption growth in the automotive, construction and metalware industries totalled 11%, 5% and 9% respectively, after a period of stagnation, while white goods and pipe industries’ consumption fell -4% and -8% respectively in 2017.

Russian Steel reckons the country’s steel exports for full-year 2018 will remain at the 2017 level, when South Korea became the world’s third-largest steel exporter, knocking Russia down to fourth. While Russian steel export volumes are likely to remain flat on 2017, growing global protectionism in the wake of US 25% tariffs will translate into fewer finished products and increased semi-finished products exports this year, Russian Steel says.

The association says high investment activity, of around RUB 2.4 trillion ($36.5 billion), in 2001-2018 will enable Russian steelmakers to keep a competitive edge in domestic and global markets.