OREANDA-NEWS. Metallurgy ranks second in importance in Russian industry after oil production. It amounted to almost 13 percent of industrial production in 2014. Russia is first in the world in a number of positions and ranks high in non-ferrous metals and steel.

Divergent trends affected this industry in the past five years and this is true today as well. Ferrous metallurgy was growing: steel pipe production alone increased by about a quarter from 2010 to 2015. Non-ferrous metallurgy was in decline, however. Aluminum production went down by 10 percent.

The industry went through difficult times in 2015. Prices on ferrous and non-ferrous metals nose-dived.

This year the scale of production may continue to decline. One of the reasons is the reduction of domestic demand. Compared to 2014, domestic consumption of rolled stock decreased by nine percent.

Russian metal products have almost exhausted their growth potential, primarily due to the introduction of protective measures against them. I’m referring to large markets, such as the United States, Canada and the European Union countries.  

Unfavourable price trends in the world markets in general are a third reason.  Prices in December 2015 on basic ferrous metals dropped by up to 40 percent, on aluminum by over 20 percent, copper by 28 percent and nickel by up to 45 percent when compared to December 2014 prices.

It is very difficult to keep exports at the same level in such conditions but the industry must do something to overcome these trends. It must also increase supplies of metal products to the domestic market. Despite our current problems, we have a good potential in this respect, considering the policy of industry development and import substitution that we opted for several years ago.