Russian steel production increased in April

Companies were able to redirect supplies to the domestic market, where steel is needed for construction projects, despite difficulties with exports. The lower ruble is giving the steel industry a boost, but export prospects are not very promising.

Russia's yearly steel production rose by 1.9% in April, reaching 6.4 million tons. Results for the first four months of the year show a 0.6% drop, to 25.1 million tons, overall. 

It is estimated that the capacity utilization of ferrous metallurgy in Russia in April at 94%, which is three percentage points higher than in March.

The capacity utilization of metallurgical companies continues to increase. With a design capacity of 1.2 million tons per year, blast furnace No. 4 was launched by MMK in early May after being shut down for overhaul in December. After repairs last year, Ural Steel began operating a blast furnace with a 1.4 million ton capacity in early March. The average daily production of pig iron at Cherepovets Iron and Steel Works grew by 23% in April compared to March.

Prices for hot-rolled steel FOB the Black Sea may drop as low as $550. Prior to the rainy season, domestic demand is also declining in India, and business is very slow in Europe. Hot-rolled steel's price might go considerably below $500 FOB.