Russia exporting less steel to Asia due to strong ruble, lack of profitability

ST. PETERSBURG. Nov 29 (Interfax) - Russian steelmakers reduced shipments to Asia-Pacific countries more than 40% in October compared with May due to a strong ruble and lack of profitability.

"Unfortunately, these are not premium markets. When we shipped to Asian markets in May and thought we would make a profit there, the dollar exchange rate fell to 50 rubles or so, and we saw our enterprises making losses of 1,000 rubles per tonne. But they continued to ship to these markets for several months since June," Alexei Sentyurin, managing director of the Russian Steel Association, said at the Russian Industrialist forum.

Shipments in October were already down 42% from May, he said.

Sentyurin said steelmakers were telling the government about the need to increase domestic consumption.

"Because this alone can be our salvation, especially at present, when we have lost our premium markets: we've lost the EU, the American markets," he said, adding that 31 million tonnes of steel products used to be exported mainly to premium markets.

Sentyurin there was surplus capacity in the domestic market: Russia produced 69 million tonnes in 2021, while steel consumption has not exceeded 46 million tonnes since 2000.

Russian Steel estimates that visible domestic steel consumption increased by 1.5% in nine months: it plummeted 42.3% in the automotive industry plummeted and 20.8% in machine building but the energy sector raised consumption 36% and construction 1.2%.