The demand for steel by the automotive industry will have fallen by 21% by the end of the year

The demand for steel by the automotive industry will have fallen by 21% by the end of the year


Finmarket.- Automotive industry ’s demand on steel will fall by 21% this year in Russian Federation, which is the biggest shrinkage amongst the main customers of steel products on an industrial segment basis. Meanwhile, the decline in the total demand for steel may reach 6% in the Russian market this year, according to the presentation of Russian Steel Association.

Despite the total annual production capacity of the Russian car plants is equivalent to  almost 3 million units, only 1.7 million vehicles have been manufactured in the country in 2019 and the number will shrink further to 1.5 million automobiles this year due to the pandemic, according to the AEB forecast. 

According to Rosstat data, passenger car production has shrunk by 25.9% year-on-year in Russia within the first nine months of 2020, to 848,000 units. Truck production was also down by 16.5% with 91,400 vehicles. Car body production also collapsed within the aforementioned period, by 89% to 19,000 units. 

Demand from the machine building industry will fall by 16% this year, as predicted by Russian Steel, followed by the energy sector at 9%. The demand shrinkage by the construction and metallurgy will be at the level of 7%. 

Russian Steel expects the demand to rise in 2021, between 5-7%. 

The domestic demand for metals shrank by 7.3% in the Russian Federation within the January-September period of 2020, the month of May being the lowest point. 

The main passenger car manufacturers in the Russian Federation are as follows: Avtovaz, Sollers Group, Avtotor, Renault Russia, Hyundai Motor Manufacturing Rus, Nissan Manufacturing Rus, alongside the largest truck manufacturers: Kamaz, GAZ and Ural. 

The Association of Ferrous Metallurgy Enterprises: Russian Steel unites the largest producers of metallurgical products in Russia; Evraz, Severstal, Magnitogorsk Metallurgical Plant, Novolipetsk Metallurgical Plant, Mechel, Metalloinvest, United Metallurgical Company, PMH and Pipe Metallurgical Company (TMK), which produce 98% of Russian cast iron, about 90% of steel and 60% of all pipes.