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Imports of stainless steel products to Russia in April 2023 reached 51,543 tons, setting an absolute record for monthly imports of this metal. This follows from the data of the Association of Consumers and Suppliers of Special Steels and Alloys (Association Special Steels), which Vedomosti has reviewed. Growth by April last year was 83%, and by March - 29%. Most imports in April came from China, India, and Indonesia. Spetsstal data includes all types of stainless steel, including billets, flat and long products, as well as welded and seamless pipes.

Imports of stainless steel began to grow in March this year – it increased by 43% compared to the same month last year to 39,941 tons. 070 tons (Vedomosti wrote about this on February 17).

Traditionally, 70–80% of stainless steel consumed in Russia is imported. This product is used in mechanical engineering, the production of household appliances, electrical equipment and consumer goods (pots, spoons, forks, knives, etc.), sanitary ware (faucets, sinks), the production of equipment for the food industry, pipes for the oil and gas industry and petrochemicals, construction, and also goes to the needs of the military-industrial complex.

According to the Russian metallurgy development strategy until 2030 approved in December 2022, in 2021, 423,000 tons of stainless steel rolled products were imported into the country, while consumption amounted to 534,000 tons, production - 128,800 tons.

According to a representative of the Ministry of Industry and Trade, who refers to Rosstat data, domestic consumption of stainless steel in 2022 amounted to 446,000 tons (thus, the fall was 16% - Vedomosti), while the consumption of hot-rolled stainless steel increased by 15% to 102,700 “It is not possible to assess the data of the Spetsstal Association, the Ministry of Industry and Trade relies on the official statistics of Rosstat and the Federal Customs Service in its work,” the representative of the ministry added.

As a representative of Spetsstal explained to Vedomosti, the reasons for the growth in imports in April were the recovery in domestic demand, overcoming the negative consequences of anti-Russian sanctions that affected the logistics of supplies and payments under contracts in dollars and euros, as well as the successful replacement of foreign suppliers of stainless steel with suppliers from friendly countries.

The main stainless steel producers in Russia are the Krasny Oktyabr metallurgical plant, the Zlatoust metallurgical plant, Izhstal, and the Chelyabinsk metallurgical plant (members of Mechel). Vedomosti sent inquiries about the dynamics of demand to the press services of these companies.

Maksim Khoruzhy, head of the stainless and special steels project at the Metallservice production and logistics holding (the largest importer of stainless steel to Russia), told Vedomosti that the large volume of imports in April is explained by the replenishment of traders' warehouses. Metallservice in January-February 2023 had the lowest balances since November 2021, while sales were growing,” he explains. The stainless steel that was imported in April was ordered back in November-December, Khoruzhy says. At the same time, the trader does not see a “sharp increase in stainless steel consumption” at the moment.

The sharp increase in imports of cold-rolled stainless steel is an indication of an earlier-than-expected recovery of production in the domestic engineering industry, Sergey Grishunin, managing director of the NRA rating service, is sure. “Own production of stainless cold-rolled steel, unfortunately, is not yet ready to meet the needs of the industry in full due to some difficulties with product quality, so the growth in imports of this type of rolled products indicates a recovery in demand for it,” he argues. Also, the demand comes from nuclear and chemical engineering in connection with the implementation of a number of major programs, for example, the construction of four low-capacity floating nuclear power plants for Chukotka, Grishunin notes. In addition, there is a revival in the home appliances segment, he adds. In addition, there is a revival in the home appliances segment, he adds.

The output of washing machines in March 2023, according to Rosstat, increased by 16% compared to the same period last year, Rosstat does not provide absolute figures. At the same time, for the entire first quarter of 2023, production decreased by 39% year-on-year to 629,000 units. Rosstat has not yet published data for April. A source in one of the unions, which includes large retailers of electronics and appliances, said that at the moment, approximately 50% of factories producing household appliances and electronics in Russia are idle or do not work at full capacity. But manufacturers such as Haier and other Chinese brands that have production in Russia are increasing production, and the Russian factories of Beko and Arcelik are also working stably.

The fundamental factor in the growth of stainless steel imports in April is the growth of domestic demand in the main consuming industries - pipe production, engineering, and food industry, Ilya Kolomeets, development director of the industry agency Metals & Mining Intelligence (MMI), agrees with Grishunin. The volume of shipments of stainless steel by domestic producers of the Russian Federation in the first quarter of 2023 increased by 12% compared to the same period in 2022, which additionally indicates a recovery factor in domestic demand in the market, he adds.

In addition, the growth of imports was facilitated by a favorable price environment in China and the weakening of the ruble - traders increased purchases, expecting a potential continuation of this trend, the expert says. According to MMI, the price of cold-rolled 304 2B stainless steel coil (benchmark) decreased from January to April by 8%, from $2593/t on a FOB basis (“loaded on board”) in Chinese ports at the beginning of the year to $2398/t in April.

The reason for the decline in prices is weak demand from end-users in China, which forces local suppliers to sell cheaper on exports, Kolomeets explains. The expert expects stainless steel prices to be supported in May-July by rising nickel prices (one of the main components of stainless steel production. - Vedomosti). Due to this, prices may rise to $2400-2475/t. But demand will continue to be paramount to the price trend, he adds. “The price in China is really good now, but what we order for it will only arrive in Russia in the autumn,” says Khoruzhy from Metallservice.

In general, in 2023, MMI expects stainless steel consumption in Russia to grow by 10–15%, both due to domestic demand factors and uneven purchases by importing traders. According to NRA forecasts, stainless steel imports to Russia in 2023 may reach 450,000–500,000 tons (an increase of 21% to 34% - Vedomosti). The main factor in the growth of demand will be the segment of production of household appliances and utensils, Grishunin believes.

Source: https://www.vedomosti.ru/business/articles/2023/05/19/975789-import-nerzhaveyuschei-stali-v-rossiyu-dostig-istoricheskogo-rekorda?utm_campaign=newspaper_19_5_2023&utm_medium=email&utm_source=vedomosti