The government of Russia has considered problems in ferrous metallurgy

Abstract

The Government of Russia at a session of 16 May 2002 considered a range of measures directed at the development of domestic metallurgy and its scientific and technological support. The urgency of this issue comes primarily from the fact that in the current year, the metallurgical industry has faced a difficult situation because of the constraints on the import of steel introduced by the U.S.A. and a number of European countries. These constraints did not leave Russian manufacturers of steel unconcerned. Experts of the Ministry for Industry, Science, and Technology have come to the conclusion that in this situation one may expect a 50% decline in the total output of metallurgical products, a reduction, by one-third, of the volume of carriage, and a 10 – 15% decline in the national economy. Therefore, a governmental plan was drawn up by which a way toward solving the problem must include federal support of the export of ferrous metallurgy products and appropriate protective measures in both internal and external markets. Furthermore, in order to support the production of ferrous metals, tariffs for services from natural monopolies need to be optimized and modernization of the metallurgical industry must be carried out. As an illustration of the situation, one may refer to the Severstal’ Iron-and-Steel Works (ISW). As follows from statistical reports, the income during the first three months of 2002 at the Severstal’ ISW decreased by 11%, that is, to 11,544.5 million roubles. The product cost was 9,562.5 million roubles, or 100.3% against the same period of 2001. The profit from sales dropped by 42%, that is, to 1,774.1 million roubles. In January – March 2002, the losses were 86.3 million roubles against a profit of 2,892.4 million roubles in the first quarter of 2001. The tax on profits and other compulsory payments for the first three months of 2002 were 408.9 million roubles, which was 2.5 times less than in 2001. In the first quarter of 2002, the net loss was 545.8 million roubles against a net profit of 1,870.3 million roubles over the same period of 2001. This notwithstanding, statistical data show that the situation in the metals market is not wholly disastrous. The Russian export of ferrous metals in January – March 2002 increased by 6.3% — to $1.42 billion. Ferrous metals in an amount of $1.27 billion worth was exported to foreign countries (except for the Commonwealth of Independent States (CIS), republics of the former Soviet Union) against $1.28 billion in 2001. The net export of cast iron from Russia over this period was 0.896 million tons (1.21 million tons in January – March 2001), or $75.9 million against $107.2 million in 2001. The export to Western countries (except CIS) was 0.833 million tons (against 1.2 million tons in 2001), or $69.5 million (against $105.5 million in 2001). The Russian export of semi-finished products of carbon steel in January – March 2002 was 3.27 million tons (2.8 million tons in 2001), or $451.6 million ($413.7 million in 2001). Of these, the export to Western countries (except CIS) was 3.23 million tons (2.79 million tons in 2001), or $444.5 million ($412.4 million in 2001). The export of rolled products (carbon steel) was 2.434 million tons (2.01 million tons in 2001), or $449.4 million ($378.5 million in 2001). Most was exported to Western countries (except CIS) — 2.286 million tons (1.988 million tons in 2001), or $400.6 million ($369.9 million in 2001). The export of ferroalloys was 75 thousand tons (89.8 thousand tons in 2001), or $43.6 million ($54 million in 2001). The export to Western countries (except CIS) was 63.8 thousand tons ($38 1 million). According to Goskomstat (State Committee of the Russian Federation for Statistics) data, the Russian import of ferrous metals dropped by 40.5% in the first quarter of 2002 against the same period of 2001 — to $122.6 million. $91.7 million worth of these products was purchased from CIS countries (against $176.5 million in 2001). Furthermore, Russia cut the import of steel tubes by 40.4% in the current year to 157.4 thousand tons ($126.2 million). From CIS countries, the import of tubes was 77 thousand tons, or $37.9 million tons worth (January – March 2001, it was 220.8 thousand tons, or $135.1 million worth). At the opening of the session, Prime Minister Mikhail Kas’yanov said that Russia in a new stage of economical development is facing three major challenges: increase in productivity of labor, development of market competition, and more effective participation of Russia in the international diRefractories and Industrial Ceramics Vol. 43, Nos. 5 – 6, 2002