Over the past year and a half, the situation in the ferrous metallurgy industry has been gradually deteriorating. This is due to a slowdown in the construction sector
And a 44% contraction in exports over the past three years. (from 34 to 19.5 million tons).
Last year, steel production decreased by 6.7% (from 76.1 to 71 million tons), production decreased in all grades (-8.5%) and rolled steel (- 4.5%), pipes (- 6.3%) and ferroalloys (- 9.4%).
In the first half of the year, smelting volumes decreased by another 4.8%, production of finished rolled products decreased by 6%, pipes by 7.7%, including due to the pace of implementation of projects in the oil and gas sector.
These results could not but affect the financial performance of all market participants. Among the industry leaders, since the beginning of the year, MMK's net profit has fallen by 83.5% (to 9.1 billion rubles), while Severstal's has fallen by 55%. (up to 37 billion rubles).
Electrometallurgists have the worst dynamics – minus 10% in 6 months.
They are currently operating at near-zero operating margins and have a heavy credit burden. In addition, they are under pressure from the excise tax on liquid steel, which is many times higher than the income tax, which creates further risks for the financial stability of enterprises and the employment of personnel.
At the same time, it is necessary to note the generally unfavorable price environment. Both in the domestic market, where prices are floating at the 2022 level, and on the external perimeter. With a global capacity surplus and a slowdown in the Chinese economy, trade protectionism and dumping from friendly countries are on the rise. (Turkey, India, Egypt, China). At the same time, export earnings are being squeezed in ruble terms due to the ruble exchange rate.
