Government initiatives
Ukraine to join Customs Union
Ukraine applied for an observer status at the Eurasian Economic Union which is to succeed the Russia-Belarus-Kazakhstan Customs Union in 2015. The effect of Ukraine participating in the CIS integration process is evaluated at $9 bln/year and in the long term can contribute up to 15% to the national GDP. The observer status is expected to be granted in October. This move is expected to contribute to the growth of cross border trade and investments with the leading CIS economies which account for 85% of the regional GDP.
Source: RIA Novosti, RBC Daily
Belarus to become a WTO member
After a 4-year break Belarus renewed talks on the WTO accession. The previous talks stalled in 2009 following Russia, Belarus and Kazakhstan determination to join the WTO together as a Customs Union. After that the decision was reversed and Russia became a WTO member in August 2012. Kazakhstan expects to finish talks on its accession in late 2013-early 2014.
Source: Expert Magazine
Open-hearth furnaces shut by 2015
The Russian Ministry of Industry and Trade expects all open-hearth furnaces to be shut by 2015. Total output of OHF in Russia is around 3 million tonnes and constantly decreasing since several furnaces are being dismantled. This decision may reduce the environmental impact of the industry and will improve supply balance taking off about 5% of steel capacity in Russia.
Source: Metal Supply and Sales
More investments in infrastructure
As a measure to spur economic growth the Ministry of Economic Development proposed to invest around $10 bln of the national welfare fund annually in infrastructure projects. According to the Ministry the Government has an option of increasing the national budget deficit compensated from the fund up to 1.5% to achieve the goal.
Source: Ministry of Economic Development, Vedomosti
Steel industry news
Tests started
Two EAF-based mills in central and south Russia with total steel capacity around 3 mty started hot tests in May. Both mills have their own rolling capacities and plan to focus on the regional markets.
Source: Metal Expert, corporate web sites
Blast furnaces idled
One blast furnace (800 tty) to be permanently shut and two idled (2.05 mty) in central regions of Russia due to an unfavorable market situation. One of the companies will shift to ductile iron pipe production with external iron supply.
Source: Metal Expert, Metal Supply and Sales
Steel using sectors
High-speed railways
The Russia Railways put forward an ambitious plan of developing a national high-speed railway network. Investments in the first 800 km long line from Moscow to Kazan exceed $30 bln, while the whole project requires around $60 bln until 2020. To raise funds the Russia Railways plans to issue long-term infrastructure bonds worth $10 bln.
Source: Russian Railways, Vedomosti
Private investments in infrastructure
According to the Ministry of Transport estimations Russian transport infrastructure needs €120 bln of private investments till 2020. A public-private partnership is defined as a key instrument in achieving the goal.
Source: Ministry of Transport
Ship-building strategy
Russia’s largest ship producer state-owned United Shipbuilding Corporation is to develop a strategy until 2030 aimed at implementing the state program in the sector. The company will focus on providing the Russian navy with the required vessels as well as supplying the necessary equipment for oil and gas production in the Russian Arctic including icebreakers. United Shipbuilding Corporation with turnover around $5 bln represents 80% of the Russian ship-building industry.
Source: President of Russia website, corporate website
