With so much focus on China these days, it is a little-know fact that Russia, in 5th position, is one of the largest steel exporters in the world. Over half of the total is in ingots and semis such as HR coil and billets. Russia exported some 30 million tons in 2007, making them a major supplier to Western Europe and the US, according to steelonthenet. However, recent moves by the Russian government in response to rapidly rising domestic prices suggests this figure may dramatically decrease in the second half of this year if proposed export taxes are imposed.
The suspicion among the steel producers is the impetus for this tax is coming from the politically strong oil and gas industry. The oil industry has seen welded tubular product prices rise dramatically and is seeking to increase the supply of raw material coil products on the domestic market. At the same time, there are suggestions that import taxes will be reduced or removed to attract in foreign steel, further boosting supply and limiting price rises in the domestic market. Whatever the motivation, if Russian exports are severely curtailed on top of Chinese supplies dropping off following the imposition of export taxes earlier this year, it could add further tightness to the global steel market. Not what consumers want to hear at a time when many were hoping the market may stabilize following dramatic rises over the last 6 months.