Capacity growth in Asia and the Middle East impedes the reorientation of Russian exports

Rising steel capacity in Asia and the Middle East will make it harder for Russian steelmakers to reorient their exports from Europe to the east, according to the latest version of Russia's steel strategy to 2030.

These opportunities reduce the ability of Russian exporters to divert export flows from traditional US and EU markets to eastern markets in the future, according to the Russian newspaper RBC, which has a copy of the document.

The Russian Ministry of Industry and Trade did not respond to Kallanish's request for comment by Wednesday's deadline.

The new project specifies that the growth of capacities directly affects the capabilities of Russian exporters, he adds. The forecast for 2023 notes that an excess of global steel production capacity will be the main constraint on the development of the Russian iron and steel industry.

According to Worldsteel, global steelmaking capacity in 2021 increased by 1.3% compared to the same period last year to 2.49 billion tons. The main increase (80%) was in Asia and the Middle East - 16.4 million tons and 9.9 million tons, respectively.

The authors of the new steel strategy propose to create conditions for the expansion of Russian steel exports to the Eurasian Economic Union (EAEU) and the CIS countries. According to the Russian Ministry of Industry and Trade, Turkey, South America, Africa, the Middle East and Southeast Asia are also an alternative to Western markets.

Meanwhile, sources believe that the EU will ban the import of most of the remaining steel products from Russia and the export of some semiconductors to the country as part of a new, eighth round of sanctions.

The Russian steel strategy aims to stimulate infrastructure, provide raw materials for the development of the steel industry, completely replace foreign components with locally produced products, and increase exports to Asia (see Kallanish passim).