The 1431st AK&M Bulletin on Metallurgy was published

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AK&M 15 July 2021 12:04 The 1431st issue of the bulletin " Branches of the Russian economy: production, finance,securities. Ferrous and non-ferrous Metallurgy" of the AK&M News Agency.

In May 2021, global steel production rose again to record levels. According to the World Steel Association (WSA), 174.4 million tons of steel were smelted during this period — 16.5% more than in May 2020, and 3% more than in April 2021. This is a new absolute maximum of world smelting. In total, 837.5 million tons of steel were smelted in the world in January-May 2021 — 14.5% more than in January-May 2020. Moreover, 56% of this volume was accounted for by China — the share of this country in global smelting has been continuously increasing since April 2020, stopping growth only in November 2020.

In the first 5 months of 2021, Russia increased steel production by 7.9% to 31.9 million tons compared to a year earlier, retaining the fifth place among steel-producing countries (according to the WSA). During this period, steel production in the United States increased by 10.6% to 34.8 million tons, in Japan-by 9.1% to 40 million tons. China increased smelting by 13.9%, South Korea Korea - by 6.9%, India - by 33.6%, Turkey-by 21.2%, Iran-by 9.2%. Recall that in April-May 2020, there was a maximum decline in steel production due to the coronavirus, and such a significant increase was achieved, among other things, due to the "low base"effect.

Since December 2020, world prices for most types of rental products have sharply and rapidly jumped up, reaching record values. In April-May, the trend continued and intensified on the growth of iron ore raw materials, rental prices almost reached record levels in 2008. However, in June, there was a reversal on the decline. Semi-finished products were the first to reveal this trend. Thus, the average price for slabs decreased by 1.1% to $971.9 per ton (as of June 11). Steel billet fell by 1% to $730 per ton during this period. But the prices for long products remain high, despite the general mood on the market. The decline in the construction rental sector is hindered by the high demand for steel products. According to analysts, the volume of housing and infrastructure construction may reach record levels this year.

The Russian authorities do not give up trying to contain the growth of domestic steel prices. One of the measures in this direction was the introduction of export duties on steel and non-ferrous metals. Thus, from August 1 to December 31, 2021, export duties in the amount of 15%, but not less than a certain minimum value, which for ferrous metals will be from $54 to $150 per ton, will apply in Russia for deliveries outside the EAEU. The MAYOR expects that the volume of duties collected on ferrous metal for August-December 2021 will amount to 110-115 billion rubles, for non-ferrous metal-about 50 billion rubles. At the same time, the government is also trying to achieve an increase in payments to the budget by threats: Russian metallurgical companies have "screwed" the state by about 100 billion rubles, First Deputy Prime Minister Andrei Belousov said earlier.

The average price of aluminum on the LME in June increased by 0.3% compared to May to $2440.4 per ton. As of July 9, the price of the metal reached $2,470 per ton. Aluminum prices continued to rise in the wake of increased investor concern about aluminum supplies due to the introduction of export duties on metals by Russia against the background of a reduction in aluminum output in China. Also, the price of metal is affected by the slow commissioning of new aluminum capacities.

The average price of copper in June 2021 was $9601.6 per ton, a decrease of 5.7% compared to May. On July 9, the price of copper on the LME reached $9437.5 per ton. It should be noted that the demand for copper is considered a barometer of the state of the world economy, and this is the first significant drop in the price of copper since the beginning of the year. Metal prices are being pushed down by weakened Chinese demand. At the same time, Fitch analysts predict an increase in global copper production in 2021 by 7.8% in annual terms due to the launch of several new projects. 

Read more about the results of the metallurgy market in issue No. 1431 of the monthly bulletin " Branches of the Russian economy: production, finance, securities. Ferrous and non-ferrous metallurgy" of the AK&M News Agency dated July 14, 2021.