1 Aug 2022 14:01

Russian metal cos working at 80% capacity, some seeing negative profitability - Manturov

MOSCOW. Aug 1 (Interfax) - Russian metallurgical exports fell roughly 20% year-on-year in Q2 2022 with capacity utilization averaging at 80%, Deputy Prime Minister and Minister of Industry and Trade Denis Manturov said at a meeting on the metallurgical sector's development chaired by Russian President Vladimir Putin.

"Russian metallurgists are now operating with limited access to Western markets. Exports in Q2 decreased by about 20%. There is also a considerable decline in domestic consumption. As a result, the sector's capacity utilization has decreased from an average of 93% to 80%. The situation is the most challenging at Magnitogorsk, at 62%, and Severstal - 72%. They produce mostly sheet products, for which demand has decreased the most," Manturov said.

"It's another matter that the export margin is not the same as it was a year ago. As the global economy slows, steel prices are falling sharply. In addition, in new markets for us, metallurgists are forced to find their niche and work at a discount. External supplies are unprofitable at the current ruble exchange rate," he said.

Given these factors, some ferrous metals producers were working at a loss in June-July: this concerns NLMK , MMK, Tula-Stal, Novstal-M, he said.