Where Russians to buy stainless steel in 2009?

According to Russia"s customs statistics, the volumes of imports of stainless steel flats over the first half of 2008, as compared to the same period of 2007, grew 20% to 55.7 thousand tons including the products with the codes: HS 7219 – 48.8 thousand tons and HS 7220 – 5.9 thousand tons.

HS 7219

The structure of imports of stainless steel flats with a width over >600 mm (HS 7219) is formed by CR and HR products with the shares of 75.9% and 24.1% respectively. The grade mix is represented by 300, 400 and 200-series with the shares of 41.4%, 52.4% and 6.2% respectively.

The main regions producing stainless steel flats with a width over >600 mm imported to Russia, as a result for the first half of 2008 are: Asia – 58.2% (1/2 2007 – 40.7%), Africa – 20.7% (1/2 2007 – 5.4%), America – 12.4% (1/2 2007 – 16.9%) and Europe – 8.7% (1/2 2007 – 29%).

A country-wise representation of the imported flats is: SAR – 20.7%, China – 14.1%, S. Korea – 12.8%, Taiwan – 12.6%, Brazil – 11.8% and India – 11.3%.

HS 7220

The volume of stainless steel flats with a width less than 600 mm (HS 7220) over the first half of 2008 grew 8% to 5926 tons.

The structure of imports of the flat products is made up by CR material whose share os 90.1% and HR – 9.9%. The grade mix is 300 and 400-series with the shares 31.7% and 68.3% respectively.

The main producing coutries of the imported flats with a width less than 600 mm are: S. Korea – 22%, France – 19.8%, Sweden – 14.7%, Taiwan – 13.2%, G. Britain – 5.6%, Turkey – 5.3% and Italy – 5,2%.

Experts’ opinion

The sharp decrease of supplies from Europe is due to the imposition of an anti-dumping duty (840 EURO/ton) over nickel-bearing steel imports as well as to the more attractive prices of Asian producers. In addition, Asian producers offer less strict payment conditions with a view of high interest rates (16-18%) in Russia.

As a supplementary support towards Asian supplies, the exchange rate of EURO/dollar was till recently in their favor.

It is worth noting that there is seen a growth of stainless steel supplies from South Africa (HS 7219). Over the recent time, Acerinox has substantially increased exports to Russia. The success must be attributed to their well-thought price policy and enhanced product mix offered.

Spetsstal Association’s opinion

According to our appraisal, the significant growth of flat imports in the first half of 2008, in addition to the afore-said, is connected with the transition of several big companies to maintain long-term direct contacts. The current rise of flat imports is by far outrunning the real volumes of consumption in Russia. This is due to negative influence of the financial crisis that is leading to swelling stocks and cutting imports in the fourth quarter of 2008. The restoration of the purchase activity must be expected by the end of the first quarter of 2009.