NLMK forecasts 23% drop in Russian steel exports in 2022

NLMK, one of the four largest steel companies in Russia, expects to see a 23% decline in exports of Russian steel in 2022, mainly of rolled products.

The company also forecast a decrease in domestic steel consumption in 2022. Construction demand would drop by 13% to 27 million tonnes (mnt), and engineering by 25.4% to 4.7 mnt, NLMK said in a release.

"We expect that exports from Russia will decrease by 23% in 2022. The main drop will be in rolled products, by 40-45%," the press release noted.

According to the company, a significant decrease in rolled products was due to the fact that this category is already under restrictions in Europe, where supplies mainly went.

Redirecting rolled products to other markets is more difficult than semi-finished due to other kinds of barriers, in the form of duties and quotas.

Production by steel mills to drop

NLMK also forecasts 15% decline in the output of Russia's steel enterprises in 2022 and 26% in the second half of 2022.

"Taking into account the indicators for Q1 of 2022 and the dynamics of the ferrous metallurgy market at the beginning of the Q1 of 2022, it is expected that the decline in production volumes of Russian ferrous metallurgy enterprises in 2022 compared to 2021 may reach over 11 mnt (-15%), while the biggest decline is projected in the second half of 2022 - more than 9 mnt (-26%) compared to the second half of 2021," the company's press release said.

NLMK Group is a vertically integrated steel company and one of the largest producers of steel products in Russia. The group's production assets are located in Russia, Europe, and the United States. The main shareholder of NLMK is Vladimir Lisin, who owns 79.3% of the shares through Fletcher Group Holdings Limited, while 20.7% of the company's shares are in free float.