Analysis
Overview of steel and iron market
Second half 2017
Welcome to the second issue of the Overview of the Russian Steel and Iron Market in 2017. This Issue offers a snapshot of the updated data for 2016, intermediate data for 1H 2017, and outlooks for 2017.
Deloitte CIS Research Center
Key findings:
In 2016, the downward trend in output and consumption that had been continuing from 2015 gave place to a trend featuring greater stability, with industry indicators seeing a change of less than 2 percent:
- Steel output grew by 0.6 percent up to 1,630 million tonnes;
- And steel consumption grew by 1.3 percent up to 1,600 million tonnes.
Over the first eight months of 2017, the global steel output reached 264.4 million tonnes, up 4.8 percent from the same period in 2016.
In August, China’s government announced that it would halve steel output in Hebei and three other steel producing provinces by up to 50% with a view to improving air quality during the winter period. As a result, the steel output in China reached a record level of 2.5 tonnes per day in August.
The protectionist measures of the US and the EU may result in larger volumes of metal concentrating on fewer markets, which poses a risk of greater price differences across the markets.
During 2017, the Russian steel-making industry has tended to cut production. The second quarter of 2017 witnessed a 3.5 percent decrease in steel output in year-on-year terms.
Based in the results of 2H 2017, NLMK was the leader in terms of EBITDA and steel output among leading Russian steel-making companies.
In 1H 2017, the year-on-year growth rate of the Russian export of basic steel products in monetary terms amounted to 66 percent for rolled products and 136 percent for tube products.
In 1H 2017, the year-on-year growth rate of the Russian import of basic steel products in monetary terms amounted to 86 percent for rolled products and 52 percent for tube products.
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