Russian steel demand is gradually returning as COVID-19 related restrictions ease and construction activity revives.
According to Sberbank, the first three weeks of August saw Russian consumers’ expenses restored to the level they were at a year earlier, and Russia’s PMI, which had collapsed to 34% in April-May, recovered to 49% in June-July.
Worldsteel figures showed that Russia’s production fell by 3% over the year to 35.3 million mt in the first half of 2020.
The period saw an 11% drop in Russian steel consumption to over 19 million mt, according to Evraz.
In the first signs of a decline in the Russian market amid the coronavirus pandemic, mills began to look for export opportunities to hedge against weak domestic demand.
As a result, from January-June, Russia’s steel exports grew between 3% and 6% over the year to 14.5 million mt. That was 41% of the country’s production in that period. The supply of high value-added products suffered the most as exports comprised mainly billet, slab, pig iron and hot-rolled coil — the least profitable products.
However, business activity in the country recovered strongly towards the end of June, and in July and August, steel demand looked similar to that of the same months of last year.