Russia's Severstal remains focused on export markets despite global protectionism

12/11/2018 12:00 - 437 Views

London — Russian steelmaker and mining group Severstal continues to see export opportunities despite protection measures taken against Russian steel in a number of markets including the US, EU and Turkey, Dmitry Goroshkov, head of marketing, said in an interview with S&P Global Platts.

Other than Turkey, the steel demand picture globally remains good, Maxim Semenovykh, heard of corporate strategy said during the interview Wednesday.

Europe, especially north and west, remains very much a target market for Severstal. For nine months of this year, Europe accounted for 66% of the company's export of semi-finished and rolled steel products.

While may of the company's CIS competitors have been largely discouraged from the EU HRC market by punitive anti-dumping duties, Severstal's ongoing HRC exports to the EU owe much to the company's individual Eur17.60/mt AD duty level, which is the lowest applied to any CIS steelmaker. Apart from HRC, Severstal's export is focused on hot-dip galvanised, colour-coated steel and other products, Goroshkov said.

"Apart from [Europe] we are seeing increasing demand from some of the CIS countries...we are looking for new opportunities there," Goroshkov added.

For nine months of this year, the CIS region was the second-largest export market for Severstal, with a 15% piece of the pie.

Turkey has taken over a large share of the HRC markets previously covered by CIS Black Sea shipments but Turkish exports is mainly focused on southern Europe, where Severstal is less active anyway, the company's head of marketing said.

Turning into pricing, Semenovykh said he thought that flat product prices are near the bottom, having lost some $100/mt in the last four to five months.

While Turkish exporters are squeezing the Black Sea and Mediterranean market resulting in falling HRC prices, the raw materials remain resilient preventing much deeper erosion of steel prices, Semenovykh said.

Steel margins have seen more squeeze in the last couple of months but they are coming down from "elevated level," therefore the recent steel price declines are seen more as logical correction, the head of corporate strategy said.
November 12, 2018
Source: SP Global
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