Russia’s Severstal sees HRC prices declining further

Russian steelmaker Severstal expects hot-rolled coil (HRC) export prices to drop to under $500/t fob by the end of the year, head of marketing Dmitry Goroshkov said ahead of the company's Capital Markets Day today.

"Prices might break $10-20/t below $500/t in the export market by the end of 2018," Goroshkov said. "We don't think that prices have a significant potential to go down from there."

But the company expects a recovery at the beginning of 2019, stimulated by restocking in Europe, as well as resilient global raw materials pricing and Chinese output restrictions. In addition, seasonal supply disruptions in Australia could give further support to steel prices.

The company noted that Russian HRC has lost around $100/t in the past four or five months, mainly affected by weaker demand in Turkey. "In our view, this kind of development is relatively logical, because the steelmaking margin was previously on an excessive, elevated level. There is a significant decline in the Black Sea market because of developments in Turkey, where demand collapsed and the American market for Turkish products closed," head of corporate strategy Maxim Semenovykh said. "We think that at this level prices are almost touching the bottom," he added.

Executives noted increased competition for HRC in Europe from Turkish mills, but said the company is focusing on sales to north and east Europe, whereas Turkish sellers mainly export to south Europe.

But Severstal has continued to sell steel at historical levels in Europe despite pressure from Turkey and import quotas introduced by the EU earlier this year. The company exported 66pc of its total semi-finished and rolled steel products to Europe in the first nine months of 2018.

CIS countries received 15pc in the same period, and Severstal noted increasing demand for steel in the region.

The company remains concerned about potential definitive quotas in the EU in 2019, but said it is exploring alternative scenarios, which would allow it to adapt its strategy depending on what measure the EU adopts. At the same time, protectionism in Turkey is not a concern, since the country is not one of its main markets.

Looking at the domestic Russian market, Severstal expects flat year-on-year steel demand in Russia — lower than previously expected — but it projects demand to grow by 1-2pc in 2019, thanks to anticipated new infrastructure projects, especially in construction, which will drive consumption.

News No: 2526
Date: 2018/11/07 - 18:37
News Source: Argus Media

Russia  HRC  Dmitry Goroshkov  Severstal  steel 


Leave a Comment:


Chinese steelmakers prefer Danieli casting technology for quality and productivity

Following recent orders from Maanshan Iron & Steel for a new bloom caster and Huaigang Special Steel for a caster upgrade with the Q-SOFT technological package, another two Chinese top steel producers, Valin Xiangtan and Hengyang Valin Steel Tube, chose Danieli casting technology to improve their steelmaking plants.

Russian energy minister, oil producers to discuss possible cut before Dec meetings: report

Russian energy minister Alexander Novak said Monday that he plans to discuss a potential output cut in 2019 with oil companies before OPEC/non-OPEC meetings in early December, the Prime news agency reported.

Australia's coal revival in full swing by 2019

Next year augurs well for the Australian coal sector. This applies to both thermal coal (used in electricity production) and metallurgical coal (used in steel production).

Putin Says Happy With $70 Crude

President Vladimir Putin said he discussed the price of oil with US counterpart Donald Trump when they met in Paris briefly on Sunday, adding that Russia is happy with current prices.

Casting and steel – The future is digital

First-hand experience of the digital future no longer requires a visit to Silicon Valley. More and more companies are realising that within the quartet of technology trade fairs GIFA, METEC, THERMPROCESS and NEWCAST new and exciting topics are being addressed! “The Bright World of Metals” is focusing on digitalisation and Industry 4.0 in 2019.

EU HRC: First 2019 automotive deals done as rollovers

Northwest European steel mills have concluded their first 2019 deals with automotive buyers at a rollover from this year's prices, following protracted negotiations.
Upcoming Events
Find a Job !
 Mines & Metals

Mine & Business Today

 Scrap & Recycling


Our partners