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Crisis, Protectionism, and China Hinder Russian Companies– 21 Feb 10

Russian metallurgists managed to provide full capacities load in 2009 only due o export contracts. Despite he industry showed 13%  fall, Russia became  the world-third steel producer in 2009.

According to the analyst of “BrokCreditServis” Oleg Petropavlovskiy,  Western and  Eastern Europe, where the decrease amounted 30% averagely  suffered most of all. At that some countries decreased steel output  by 45–50% as compared with 2008. China managed to  show 10% growth. Meanwhile export  contracts and Russian  ruble devaluation helped Russia to  overcome  small and big market players in whole  South East Asia and in China, in particular, despite the import duties introduction  on electrical steel. “Novolipetsk Steel”, one of the  world-largest  manufacturers of these  products, was not very much touched by this, since the import duty  for its products is rather low and the company  can further the supplies to this country”, - said Mr Petropavlovskiy.

Although the world leaders several times announced  the necessity to reject the protectionism, the number of the bans  is growing, the experts say.  “Today the number of the bans in the world is ten times as many as, for example,  20 years ago” - said the CEO of Rusmet.ru, Victor Kovshevny.

The survival of the industry is connected to metal products consumption in Russian domestic market and to  further development of the industry in China. “If China can not keep  its domestic steel consumption, Chinese steel will rush to global market and  Russian metallurgists  will loose the advantage they have comparing with other sectors. However, China is ready to Buy Russian semi products”, - Mr Kovshevny says.

The competitive ability of Russian metallurgical companies depends on Western investments, the analysts say.  But only players, transparent for the investors can attract the assets.

Feb 21, 2010 09:06
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