Russian Steel Market Overview

HRC Export Prices Remain Firm Amid Limited Availability

Russian hot-rolled coil (HRC) export prices continued to demonstrate resilience despite relatively modest export activity. Most producers remained focused on supplying the domestic market and neighboring countries, limiting the volume available for overseas sales.

A substantial share of July production has already been sold, leaving only limited export tonnage available. Market participants reported that tight supply conditions continue to support pricing, while mills remain comfortable with their current order books.

Iran remains one of the strongest destinations for Russian flat steel exports. Demand for both hot-rolled and cold-rolled products strengthened further during the week, with purchasing activity for July shipments gaining momentum.

A non-sanctioned Russian producer was reported offering July-production HRC at $535-550/t FOB Black Sea and has already sold most of its approximately 30,000-ton export allocation. Strong domestic demand continues to support sales, while any additional export business is expected to be sourced from August production.

Meanwhile, a sanctioned Russian supplier was reportedly offering HRC to Iranian buyers at $563-565/t FOB Astrakhan, with around 75% of its July export quota already booked. The premium achieved by sanctioned suppliers highlights the strength of current Iranian demand and the limited availability of Russian material.

CRC Demand Strengthens Alongside HRC

Demand from Iran has not been limited to hot-rolled products. Market participants estimate that cold-rolled coil (CRC) currently accounts for approximately 15-20% of total Russian flat steel orders destined for Iran.

Export prices for non-sanctioned Russian CRC were assessed at approximately $635/t FOB Black Sea during the week. The growing share of CRC purchases reflects improving demand for higher-value flat products and provides additional support to Russian mills' export portfolios.

Combined with strong domestic consumption, active Iranian buying continues to offset weaker demand in some traditional export markets.

Domestic Flat Steel Market Continues Upward Trend

The domestic Russian flat steel market remained firm, with spot prices for hot-rolled sheet and welded pipes continuing to rise.

Spot quotations have nearly reached parity with primary mill prices, improving profitability for distributors and reducing the margin pressure that has characterized the market over the past year. Although pipe producers in Central Russia continue to face challenges, the gap between pipe prices and coil costs has narrowed noticeably.

Russian steelmakers are now targeting additional increases in factory prices for July deliveries, with expectations that hot-rolled sheet and coil prices will exceed RUB 60,000/t CPT for the first time since the summer of 2025.

Producers cite strong order books, limited supply, and stable demand as the primary reasons for seeking higher prices. Export commitments to Iran have also contributed to mill confidence and reduced pressure to compete aggressively in overseas markets.

Billet Export Market Begins to Cool

In contrast to the strength observed in flat products, the Russian billet export market has started to show signs of weakness after several months of growth.

Earlier this year, billet prices rose steadily as geopolitical tensions in the Middle East disrupted regional supply chains, increased freight rates, and reduced the availability of Iranian material. However, market conditions changed toward the end of May.

Russian billet export prices in Black Sea ports declined to approximately $485-488/t FOB, compared with previous levels of $488-490/t FOB. While the adjustment remains relatively modest, it signals a shift in market sentiment after months of uninterrupted increases.

Weak Turkish Demand Pressures Billet Prices

The main factor behind the softening billet market is weaker demand from Türkiye, one of the largest consumers of Russian semi-finished steel products.

Turkish mills have become increasingly cautious amid sluggish domestic construction activity and weaker rebar consumption. As demand for finished long products remains under pressure, many buyers have postponed billet purchases and adopted a wait-and-see approach.

The decline in Turkish buying interest has reduced export opportunities for Russian suppliers and increased competition among sellers seeking to secure new orders.

Chinese Competition Intensifies

Additional pressure has emerged from China, where billet exporters recently lowered prices by approximately $10-15/t. Chinese billet offers were reported at around $525-530/t CFR, increasing competition in key import markets.

Russian exporters have been forced to adjust to the changing market environment, although a relatively strong ruble and elevated production costs continue to limit their ability to offer significant discounts.

Market participants reported a noticeable gap between buyer and seller expectations. While buyers are targeting billet prices of approximately $505-510/t CFR, Russian suppliers continue to seek $515-520/t CFR. This difference has limited transaction activity and contributed to a more cautious trading environment.

Despite weaker demand conditions, Russia remains the largest supplier of billets to Türkiye.

During the first quarter of 2026, Russian billet exports to Türkiye doubled year-on-year to approximately 388,000 tons, allowing Russia to maintain its leading position in the market.

However, competition has intensified significantly. Chinese billet shipments to Türkiye increased by approximately 2.5 times, while exports from the UAE surged nearly 39-fold. Suppliers from Indonesia, India, and Vietnam have also strengthened their positions, creating a much more competitive environment for Russian exporters.

The growing number of alternative suppliers has reduced Russia's pricing power and is expected to remain a key challenge throughout the second half of the year.

The Russian steel market is increasingly characterized by two distinct trends.

The flat steel segment remains well-supported by strong domestic demand, tight supply conditions, and robust purchasing activity from Iran. Limited export availability and healthy order books are expected to keep HRC and CRC prices firm in the near term, while mills continue to target higher domestic prices for July and August deliveries.

At the same time, the billet market is entering a more challenging phase. Weak demand from Türkiye, growing competition from China and other Asian suppliers, and widening price expectations between buyers and sellers are placing downward pressure on export prices.

While a significant price correction appears unlikely due to production costs and supply constraints, billet exporters may need to adopt a more flexible approach in negotiations if demand conditions fail to improve.

Overall, domestic strength and Iranian demand continue to support Russia's flat steel market, while the billet segment faces increasing headwinds from a more competitive global environment.