Steel demand in Russia may decrease in 2015

According to a report submitted by the Russian Steel Associations, domestic demand for finished steel products is likely to decline significantly during 2015, and the country's steel production may also fall from the previous year.

Domestic demand could decline by almost 11.5 percent in 2015 to 40 million tonnes, compared with a total consumption of 45 million tonnes during 2014. According to the Worldsteel Association, the demand for steel from the automotive sector is likely to fall by almost 15 percent, while in mechanical engineering and instrumentation it will decline by 10.2 percent.

In addition, the association envisions a drop in demand from the country's construction sector by 8 percent, but this does not apply to the central part of Russia and its capital. Given the high demand for new housing and the lack of free building plots, Moscow is holding demolition of buildings which cannot be repaired , in order to free up areas for the construction of new facilities.

Domestic steel production could decline by almost 3 percent during 2015 to 69 million tonnes, down from 71 million tonnes during 2014, mainly due to reduced demand for steel in the country. In this situation, factories are likely to seek to increase exports and search for new markets for their products in order to compensate for the decline in domestic demand.

At the same time, the export of finished steel products throughout 2015 may increase by 8 percent to 27 million tons, and the import of metal products to Russia is likely to decrease to 4 million tons this year from 5 million tons in 2014. The report also says that open-hearth production is expected to drop to almost half during 2015.