It's a fantastic time for the Russian steel industry

The depreciation of the ruble, which led to a deterioration in the economic situation for many Russian enterprises, but not for all. The country's steel mills suddenly found themselves in the most favorable conditions among other world producers.

Steel producers, including OJSC Novolipetsk Metallurgical Plant, PJSC Severstal, pay wages and other expenses in rubles, including transportation, and earn dollars or euros on exported steel. This allows them to undermine competitors such as ArcelorMittal, the world's largest steel producer, while maintaining profitability.

BCS Financial Group research has shown that this is a fantastic time for the Russian steel industry. Most companies have the best profitability since 2007 due to the weakening ruble.

Even last year, before the weakening of the ruble, the industry was in good health. Steel output last year reached its highest level since the global financial crisis, as demand in Russia was strong and began to recover in European export markets. Russian metallurgists have invested billions in modernizing Soviet-era factories and produce more steel products than any other country in Europe, which is an important export market.

In the opinion of the CRU Group consultant, at the present time, at Russian factories, costs in rubles have almost halved in dollar terms. Hot rolled products now cost US $ 244-250 per tonne in Russia, compared to US $ 405 per tonne in Brazil and $ 434 per tonne in China.