Tarnavsky shared his forecasts on the current economic and trade dynamics in the region. He explained the effects of Russia's regulations on steel and scrap exports on the industry.
What is in store for the CIS region in the last quarter of 2024 for the future of semi-finished products? Can we know your forecasts?
I do not expect any significant changes. It is unlikely that the issue of payments bypassing sanctions will be resolved before then. Competition from cheap semi-finished products from China, South-East and Middle East countries (Algeria, Oman) will probably continue too. Therefore - difficult sales, insignificant volumes, low prices.
“Exports of steel products need to be supported in every way”
What do you think about Russia's temporary abolition of export duties in foreign currency on certain types of steel products?
Undoubtedly, it is the right decision. We should cancel all duties at least from the beginning of 2025. In general, exports of steel products should be supported in every possible way. Russian steel companies need it due to the availability of excess capacity. Without exports, steelmakers will have problems with capacity utilization, and surplus will appear on the domestic market. This is what we will see in 2024.
How do you assess Russia's extension of the tariff quota on scrap exports?
As an inevitability. There is not much scrap metal on the Russian market. Therefore, metallurgists will continue to lobby for export restrictions. Relatively cheap scrap is their competitive advantage. And it is indeed cheaper in Russia than on foreign markets.
“If the obstacles persist, the turnover will continue to decline”
How would you assess the prospects of CIS billet producers for 2025? What are the prospects for producers when viewed from the point of view of trade relations with Türkiye?
As long as sanctions are in place and alternative mechanisms for international payments that are not dependent on the Western financial system are not created, the prospects will not be very favorable. Türkiye is reducing its billet imports, and Russia's share in the first five months of 2024 amounted to only 20%. Compared to January-May 2023, shipments are down by more than two-thirds. With inexpensive billets from China, Southeast Asia, Algeria and the Persian Gulf countries available on the market, the positions of Russian companies will be relatively weak due to sanctions. If it is possible to remove this factor from bilateral trade between Russia and Türkiye, some recovery of Russian billet supplies to Türkiye is possible. If the obstacles persist, the turnover will continue to decline.
Comments
No comment yet.