Market review

Russian steel market trends

Russia’s economy contracted by a further 0.2% in 2016, driving steel consumption down by 4% to 34.6 million tonnes, compared with 36.0 million tonnes in 2015. Demand decreased by 3% for long steel and 11% for tubular products, but increased by 3% for flat products. Demand also weakened by 12% for rebar, angles and channels, while consumption of beams strengthened by 10%. The Russian rail market delivered the highest segmental growth, consumption surging by 52% to 1,050 thousand tonnes, compared with 690 thousand tonnes in 2015.

Russian export volumes increased by 4% to 29.7 million tonnes for the year despite the flagging consumption figures, largely thanks to high export prices and a weaker Russian rouble year-on-year. The combination of these negative and positive effects left overall Russian steel product output mostly unchanged.

During 2016, Russian steel prices were influenced by positive global steel market trends. The rebar price CPT Moscow averaged US$386 per tonne, up 10% from US$352 per tonne in 2015. The price for channels remained mostly unchanged, averaging US$417 per tonne. Hot-rolled coil averaged US$430 per tonne CPT Moscow, up 9% from US$394 per tonne in 2015. Plates averaged US$422 per tonne, down 2% from US$433 per tonne in 2015.

Russian steel consumption by product type, mt

Other Steel segment market trends

In Ukraine, domestic steel consumption rose by 26% to 3.7 million tonnes in 2016, up from 2.9 million tonnes in 2015, on the back of a nascent economic recovery following the political instability of 2014-2015. Export volumes edged up by 2% to 17.9 million tonnes.

Kazakh steel consumption dropped by 20% to 2.2 million tonnes in 2016, compared with 2.7 million tonnes in 2015, due to economic headwinds. Steel product exports climbed by 30% to 2.6 million tonnes on the back of favourable export conditions, including a surge in prices and local currency devaluation.

Russian steel prices, US$/t