Ten year anniversary of the China Special Steel Enterprises Association

Over the last years, the evolution of the world’s stainless steel industry has been receiving a robust prop from China. The ongoing growth of stainless steel output in China, truly, enthralls and amazes. Yet ten years ago nobody would imagine that China should become number one in the branch with former leaders Japan, USA, South Korea, Germany, Italy and Belgium lagging behind.

According to experts’ appraisal, in 2007 the stainless steel production in China amounted to 7.4-7.5 million tons that is over 25% of the world’s aggregate output. New integrated facilities put into operation in China along with the permanently growing demand in the local market make it a perfect basis for a further onward development in the field.

Unlike the Chinese market’s status, the Russian stainless steel market is still to experience its boom. Stainless steel consumption in Russia is being spurred by the pivotal changes in the country related to the execution of nation-wide, state-initiated projects of redevelopment of the machinery construction sector, power engineering, atomics, oil-and-gas production, and all-important improvements in the social framework.

Now that Sochi has won the bid to host the Winter Olympic Games 2014, it is expected that stainless steel demand in the region will be high, first, for the construction of hotels, sports and culture facilities, and transport infrastructure, as well as for the refurbishment of resorts and public buildings. Investments from the government and corporate sectors are expected to exceed 20 billion dollars in the coming years, making it a perfect location for a stainless steel boom in the region and in Russia as a whole.

 The overall consumption of stainless steel in Russia in 2007, as compared to 2006, grew 7.1% to 298 thousand tons including: flats – 151 thousand tons, long steel and wire – 86 thousand tons, welded tubes – 29 thousand tons, seamless tubes – 24 thousand tons and billets – 9 thousand tons. In this consumption volume, the share of imports accounts for 170 thousand tons that is 57.1%. In 2007 stainless steel imports to Russia grew 7.3%.

As a result for 2007, China has become the leading exporter of stainless steel flat products and seamless tubes to Russia. China-made stainless steel flat supplies grew 7633 tons in 2006 to 22828 tons in 2007 (22.4% of the overall imports). Stainless steel seamless tubes supplies grew 2384 tons in 2006 to 6178 tons in 2007 (44.7% of the overall imports).

Spetsstal Association hopes that in the nearest future the business connections between Russian and Chinese companies will serve as a beneficial ground for setting up large joint projects in stainless steel on the Russian territory.

Russia has all the necessary energetic and labor resources for building modern stainless steel making facilities. At present the majority of deficit raw materials are going for export. In 2007 nickel exports from Russia amounted to 255 thousand tons, ferronickel – 27 thousand tons, ferrochromium – 371 thousand tons, stainless steel – 197 thousand tons.

Considering its current low level of electricity consumption and the availability of qualified personnel, Russia has a perfect potential for housing up-to-date integrated stainless steel making plants. China has already passed the start-up stage and gained a valued experience in setting up modern facilities.

An important role in the development of business relationships is played by specialized associations. Thanks to their active part, potential partners get to know each other and set up new businesses.

Spetsstal Association sincerely congratulates the China Special Steel Enterprises Association with the tenth anniversary. Very much has been done and still more grandiose things to do.

On 3-4 June 2008 in Moscow there will be held the Russian-Asian Stainless Steel Forum kindly co-organized and supported by CSSC. The official website www.russia-asia.ru.

Spetsstal Association with the greatest regard hopes that the relationships between our countries will keep on developing and growing strong.

Yours truly,

Spetsstal Association