Russian steel export gains limited in May

Russian export-bound rail shipments of steel rose only marginally in May compared with a year earlier, limiting the extent to which any influx of cheap Russian steel into overseas markets was a major driver for lower Turkish steel and scrap prices in recent months.

Deliveries of steel by rail to export terminals in Russia do not fully indicate the country's total exports but they account for the vast majority of portside material.

According to Argus analysis, Russian export-bound rail shipments of hot-rolled coil (HRC) to Turkey totalled 167,753t in May, according to Russian rail customs data, up by 2.9pc from 162,864t in May 2021. A further 282,594t of Russian HRC was bound for export to other countries in May, more than half of which was dispatched to Uzbekistan and Belarus and consequently not in competition with Turkey or other global steel exporters.

Overall Russian HRC exports averaged 563,616 t/month in the second half of 2021, according to official customs data. May 2021 Russian export-bound rail shipments totalled 440,921t.

Russian export-bound rail shipments of steel billet totalled 475,966t in May, up by 1.8pc from May 2021.

May shipments bound for export to Turkey totalled 50,386t, up by 16.8pc from 41,915t in May 2021. This is not an insignificant increase, but it does not reflect widespread belief throughout the Turkish ferrous markets that an enormous volume of low-priced Russian billet was sold to Turkey in April-May.

An additional 425,580t of Russian export-bound billets was dispatched in May, of which 373,002t was destined for Switzerland, Taiwan and Kazakhstan, indicating limited direct impact on Turkey's billet sales avenues.

Russian rebar exports have become a virtual non-factor in global markets in recent months. Argus discontinued its fob Black Sea steel rebar assessment this week because of the severe lack of rebar cargoes being sold out of the Black Sea in May and June.

By Alex Reynolds