|Novolipetsk Steel (NLMK), Russia’s largest steelmaker, increased the export sales volumes from its Russian assets in 2018 because of higher demand for steel slabs and pig iron, the company said on Friday January 18.
NLMK exported 10.91 million tonnes of semi-finished and finished steel products from its flat and long steel divisions in 2018. This was an increase of 9.1% from the divisions’ total exports in 2017, which was 10 million tonnes.
Meanwhile, domestic sales in Russia came to 5.78 million tonnes. This was a reduction of 4% from local shipments a year before, which totaled 6.02 million tonnes.
Sales to the home market fell due to decreased shipments from the company’s flat steel division because of “lower demand in the large-diameter pipes [LDP] segment and the construction industry, and planned hot-rolling mill maintenance.”
Finished steel sales by NLMK’s Russia flat products division were down by 6% year-on-year in 2018 to 5.55 million tonnes, against 5.89 million tonnes in 2017.
Meanwhile, sales of finished steel products by the company’s long steel division increased by 6% year-on-year to 2.41 million tonnes in 2018, against 2.28 million tonnes in 2017. This was mainly due to an increase in the sales of rebar and wire rod, driven by stronger demand in the Russian market.
The company also redirected sales “to semi-finished product exports, driven by intensified demand in fourth quarter of 2018.” NLMK includes pig iron among its semi-finished materials, while Fastmarkets defines pig iron as a raw material.
NLMK’s sales of semi-finished steel products, including slab, billet and pig iron, rose by 20% to 6.8 million tonnes in 2018, supported by higher demand in export markets.
Of the total figure, sales of semi-finished steel products to third parties increased to 4.45 million tonnes. NLMK fed the rest of the tonnage to its foreign subsidiaries and affiliates in the United States and Europe.
The major share of this volume was slabs. Sales of this material to third parties increased by 10.5% to 2.78 million tonnes, against 2.51 million tonnes in 2017. The rise was mainly attributed to improved demand from Turkish and Asian customers, a company source told Fastmarkets.
The annual average price assessment for CIS slab exports was $510.37 per tonne fob Black Sea in 2018, against $439.47 per tonne fob in 2017, according to Fastmarkets’ price archive.
Pig iron sales to third parties by NLMK more than doubled in 2018, reaching 907,000 tonnes against 435,000 tonnes in 2017.
“The growth was related to higher sales to the US. Other markets were Southeast Asia and Europe, but no large volumes were shipped there,” a source familiar with the situation told Fastmarkets.
Pig iron demand in the US increased after that country announced its Section 232 import tariffs on steel products in March 2018.
Over the first 10 months of 2018, pig iron imports to the US increased by 7%, to 4.73 million tonnes, according to the International Steel Statistics Bureau (ISSB). Russia was the largest supplier, shipping 2.52 million tonnes of pig iron to the US.
In 2018, Fastmarkets’ annual average import price assessment for pig iron in the USincreased to $396.61 per tonne cfr, from $364.57 per tonne cfr a year before.
Meanwhile, NLMK’s billet sales to third parties surged by 12% in 2018, to 770,000 tonnes, against 686,000 tonnes in 2017.
“The growth was attributed to improved sales to Turkey and Africa,” the company source said.
The annual average price assessment for CIS export billet was $481.04 per tonne fob Black Sea in 2018, against $435.40 per tonne fob in 2017, according to Fastmarkets’ price records.
The remaining 2.38 million tonnes of semi-finished steel products was recorded as slab deliveries to NLMK Belgium Holdings (NBH). This includes producers NLMK Clabecq (Belgium) and NLMK Verona (Italy), which produce steel plate, and NLMK La Louvière (Belgium) and NLMK Strasbourg (France), which produce flat steel.
The figure increased by 15% year-on-year, from 2.07 million tonnes in 2017, to cover the needs of the division while its sales grew.
Source from Fastmarkets MB