Severstal, one of the key Russia’s steelmakers and hot rolled coil exporters, has said it expects domestic demand to decline by five to seven percent this year compared to 2019. However, no significant drops in production are anticipated as livelier exports would compensate for weaker local demand.
April and May are considered to be the toughest months in terms of the impact of Covid-19 on local Russian consumption as the introduced restrictions had a negative influence on various industries’ business activities. All three Russian mills have significantly increased their export allocations, which were mainly sold to Southeast Asia, China and Turkey, while some volumes were also shipped to the EU. “The second quarter will be the most difficult for us, as it will be for the whole market,” a Severstal official said. In June, however, the situation improved and livelier local sales were seen as some restrictions have been eased. Nevertheless, domestic demand is still estimated by Severstal as being 17 percent lower than a year ago. Severstal estimates the share of its exports at 48-50 percent in the second quarter, versus 45 percent in the first quarter.