The growing
construction sector in
Russia has made it possible for Chinese steel producers to increase their presence in the Russian domestic market. In 2006, the increase in the exports of steel products from
China to
Russia became very noticeable. According to the statistics, in 2006 Chinese steel exports to
Russia totaled $230 million, an increase of 2.7 times compared to 2005.
Chinese exports are especially present in
Russia's Siberia and
Far East regions. Geographical proximity, the relatively low
freight rates from North
China to the Russian regions in question, as well as the inability of the local producers to satisfy the market demand, have all contributed to opening up room for Chinese exporters.
The last point mentioned above is especially true as regards
rebar exports. The growing
construction sector in
Russia and the presence of only one big producer of
rebar in
Russia's Siberia and
Far East regions – i.e., ZapSib, has made Chinese
rebar exports more than welcome in the region. Market players report that the stocks of traders in the Siberia and
Far East region are currently full of Chinese-origin
rebar, for which there is a great demand in the market. One of the main reasons for such a successful expansion is the very competitive price of Chinese
rebar. SteelOrbis has been informed that Chinese-origin
rebar is currently being offered to
Russia in the range of $425-435/mt FOB
China. With the
freight rate standing at about $10-15/mt for North
China to
Russia's Siberia/
Far East, this price makes Chinese
rebar very competitive in the Russian domestic market. In comparison, local traders are offering ZapSib
rebar to the regions in question at Ruble 17,200-18,100/mt ($648-682), excluding VAT.