Russia’s steel consumption increased in 2023 by 7% year-on-year to 46.3 million tonnes, Russian steelmaker Severstal estimates – Kallanish .

The main drivers of Russia’s economic growth remain large-scale infrastructure projects and projects aimed at import substitution across all major sectors, with a primary focus on engineering and manufacturing.

Although the Russian economy experienced growth throughout 2023, the escalation in the key interest rate and subsequent tightening of lending conditions, including mortgage loans, led to a constraining of demand within steel-consuming industries.

The largest contribution to demand was from the construction industry, which grew by 9% on-year. The consumption of steel products in construction of infrastructure facilities increased by 13%, commercial buildings by 9% and residential housing by 10%.

Following a decline in 2022, steel consumption by machinery producers rebounded by 14% in 2023.

The automotive industry experienced a 29% increase in steel consumption, primarily driven by demand for trucks, commercial vehicles, and specialized vehicles. The surge was further propelled by production expansion at Avtovaz, a key automotive manufacturer, and the heightened output of auto components.

In 2023, the railway engineering segment was able to address component availability issues, aligning with increased demand for freight transportation. This resulted in higher production volumes and a subsequent 15% rise in steel consumption within the industry.

The energy market, however, contracted by 5% in 2023, driven by a decrease in demand for steel from the gas production and transportation segment, attributed to adjustments in companies’ investment programs.