Due to a combination of plentiful raw material supplies and political history, the CIS region produces far more steel than is needed to meet demand within the region. It is the largest net exporting region in the world and even in 2009, CIS countries exported 49 million tonnes of steel mill products (semis, long & flat products, tubes) to countries outside the region, while importing less than 3 million tonnes. ISSB holds trade data at 6 digit HS tariff level for the dominant steel nations of the CIS region: Russia, Ukraine, Belarus and Kazakhstan, whom together produce 99% of the region’s steel. Additionally with export coverage of 97% of steel production globally, ISSB is ideally placed to assess the market for steel in those CIS countries for which national trade data is not available.
Crude Steel Production
The CIS is the cheapest region in the world in which to produce steel, predominantly due to the abundance of steelmaking raw material and energy supplies. Crude steel production reached a recent peak in 2007 with both 2008 and 2009 seeing significant falls. After a small recovery in 2010 and 2011, steel production has been on a decline for the past three years, with a 2014 figure, that has been affected by the unrest in Ukraine, some 15% below the 2007 output tonnage.
Below we summarise World Steel Association crude steel production data for the CIS region.
Trade in Steel
Although Russian exports have been on a general downward trend over the past 10 years, the country was still the fifth largest in the world last year after China, Japan, the EU28 and South Korea. Indeed 2014 saw a bit of a recovery in steel production, despite the economic turmoil in the region to the highest level since 2010, driven by competitively priced steel from producers who encountered a difficult domestic market following the depreciation of the oil price and political unrest in the region.
Following the 3% increase in Ukrainian exports in 2013, the well documented unrest in the East of the country drove exports from the county down 12% as operations at steel mills were disrupted.
In 2011, exports from the CIS nations were down 4% with large increases to Turkey being offset by falls to Asia and Africa, a trend that was reversed in 2012 as exports to Asia and Africa increased and exports to the Middle East and Turkey collapsed. In 2013, exports reduced by 6%, driven by large falls in material going to Asia and the Middle East, somewhat mitigated by increased exports to Turkey and Egypt. In 2014, the main drivers for the increase in exports were a growth in shipments to Africa, Turkey and other regions, most notable North America with large declines seen in exports to Asia and the EU28.