The Russian currency, ruble has depreciated more than 45% of its value this year, hit by low oil prices and western sanctions against Russia over its role in Ukraine’s crisis.
Ruble, which was trading at 37 per USD in September, has significantly fallen to 54 per USD in December, at the time when crude oil prices have slipped from USD 94 to USD 68 per barrel.
The ruble is among the most battered currencies this year, along with the Ukrainian hryvnia. Its decline was compounded by a collapse in oil price, a crucial export for the Russian economy.
Will it Impact Indian Steel Market
Yes, depreciating Russian currency is a big threat for Indian steel market. Weak currency means better realization for exporters based in Russia.
According to World Steel Association data, Russian steel production was about 68 MnT in 2013 and about 58 MnT in 2014 (Jan-Oct). Russia exported about 23 MnT of steel in 2013 largely to Europe & Ukraine.
Since Russia and Ukraine is under going a geo-political tension, Russian exports to Ukraine have fallen. On the other hand, Europe is closed due to winters and upcoming Christmas holidays.
Experts believe that Russian steel producers will be looking for alternative market and India will be a big potential for them, especially when Indian steel industry is struggling with domestic Iron ore & coal supplies. Most of the smaller & medium units are shutting their shops due to low margins.
Lower offers from Russia
Importers mentioned that they are receiving offers from Russian counterpart at a competitive price. Last week, HRC offers were assessed at around USD 490-495/MT CFR India, which is in line with Chinese offers.
“Offers from Russia are increasing because of depreciating Currency in Russia. Offers are quite competitive to Chinese offers and Russian quality is supposed to be better than Chinese,” said an importer.
Though, not many imports have come till now, Indian steel mills are keeping their fingers crossed.
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