What Happened in Russian Steel Market this Week?

Russia’s flat products export offers fell by USD 5-10/MT, Russian steel giant Severstal sued U.S. government over import tariffs

After the Trump government announced its steep import tariffs, steel prices across the globe which were on roll since February observed a considerable fall. The semi-finish and flat steel prices from steel giant China have lowered down especially in past two weeks, following which other countries including Russia have also curtailed its prices.

According to market sources, Russian exporters are currently keeping a wait and watch mode and are not actively involved in the overseas market due to the downtrend of prices in the global market. Whereas in case of Russia’s domestic market, although there is an improvement in seasonal demand, manufacturers are currently selling flat products at lower prices in order to clear the stock that was purchased when prices plunged.

The export offers for billet from Russia are currently being heard at USD 520-525/MT, FoB Black Sea (down by USD 5-10/MT against previous week). While HRC (2.5mm, S235) prices have come down by USD 5-10/MT and is currently being traded at USD 605 to 615/MT FoB Black Sea. CRC (0.9mm, SPCC) offers are being heard at USD 645-650/MT, FoB Black Sea. The HR sheet (4mm) in country’s domestic market is being traded at 42,500-45,000 roubles per tonne (USD 744 – 787) cpt Moscow, including VAT.

SteelMint has heard that any significant increase in Russia’s flat products export offers in the month of April is unlikely unless there is a dramatic surge in export offers from China.

A lawsuit filed against U.S. government by Russian steel major Severstal

After the announcement of U.S. import tariffs on steel that came into effect on 23 Mar’18 which included exemption of seven countries, many of the U.S. steel exporting countries that were not excluded from tariffs warned the U.S. government against the legal actions.

Now according to recent reports, the first company to sue the Trump government against import tariffs is Russian steel giant Severstal.

The company has filed a lawsuit in United States Court of International Trade demanding exemption from import duties similar to those given to seven other countries. The company stated that the tariffs will create “irreparable damage” to its trading company Severstal Export Miami Corp in U.S. It alleged that if its U.S. trading partner in Miami has to pay 25% import tariffs to procure material from its parent company in Russia, the trading partner in U.S. would go bankrupt as it is a small company with revenues of less than a million and only two employees. It also that cited the extra burden of import tariffs will have to borne by the company and cannot be passed to the customers in the presence of high competition.

Russia is one of the key steel importers for U.S. According to U.S. customs data, in 2017, the country imported about 2.90 MnT of steel from Russia and its percentage contribution in U.S. total imports stood at 8%. U.S. steel imports from Russia increased significantly by about 49% in 2017 against the previous year. Russia’s steel production is concentrated among a handful of companies with top five companies including Severstal accounting for more than 80% of production.