On June 18 at the Government house of Moscow was organized a seminar and business Breakfast between major Chinese suppliers of galvanized and coated steel, and the Russian consumers and producers.

Is there a future for Chinese on the Russian steel market?
What awaits China on the market of zinc in Russia?
Do Russia need the Chinese galvanizing in Russia?
Russian producers control the import share of Chinese steel.

On June 18 at the Government house of Moscow was organized a seminar and business Breakfast between major Chinese suppliers of galvanized and coated steel, and  the Russian consumers and producers. During the meeting they managed to establish personal contacts, to conduct negotiations about deliveries, to discuss the trends of the market. From the Chinese side the event was attended by the following companies: CNBM International Corporation Dalian Xingang Group Co., Shenzhen Welmetal Steel Sheet Co., Shenyuhao Tianjin International Co., Xiamen Construction & Development Inc. The delegation was headed by representatives of the co-organizer of the seminar – information and research firm Mysteel. The participants from the Russian side are  the Kazan branch of the Kama plant.."Metallokrovlia", Magnitogorsk metallurgical plant, MAXPROFIT, Promstalprofil, Standoff, Steel constructions-Proflist, Trimo-VSK. The seminar was also attended by international trading company Galex Steel International and Profmetallservis from Belarus.

The discussion was opened by  Analytics from representatives of Mysteel, the largest news Agency on the steel market of China. The analyst Annie Wang noted that in recent decades the Chinese steel industry has developed rapidly, and  became  the indicator  for the world market. Steel production increased from 128.5 million tons in 2000 to  822.7 million tonnes in 2014, while the share in the world market increased from 15% to 50%. While in Russia, steel production increased from 59.1 million tons to 70.7 million tons during the same period, the global market share decreased from 7% to 4%. China is also a major consumer of steel in the world (48%), the share of Russia - 3%.
 
The production of galvanized steel in 2014 was  50.75 million tons (+17% compared to 2013), and coated steel - 8,25 million tons (+9%). For the first four months of 2015 China made 16,29 million tons of galvanized (+7% compared with the same period of 2014), and 2.32 million tons of coated steel with coating (-6.8%, due to lower demand for this type of product).

In 2014 China's investment in the steel industry amounted to 478,9 billion yuan ($77,14 billion), a decline of 5.4% compared to the same period in 2013. Experts
 
We expect further slowdown of growth in the nearest 5 years, due, primarily, with the completion of the "great construction projects" in China, a decline in demand for domestic and foreign markets. In the current situation, Beijing decided to start the implementation of long-term economic program "One belt, one road" (One Belt and One Road), with the aim of finding new markets for Chinese products by investing in infrastructure in less developed countries. "One road" is the Maritime silk road of the XXI century, "one belt" - a common economic zone.

Mysteel forecasts that in 2015 steel consumption in China will decrease by approximately 1.36% to 728 million tons, a decline of production is expected to be 0.36% to 820 million tons, However, the World Steel Association has a different opinion: according to the restructuring in the economy, steel consumption in China will grow by 0.8%, in the CIS countries to 1.75% (to 58 million tons).

With regard to external markets, according to flexible policies of the PRC concerning VAT refunds to exporting enterprises in 2014, the volume of exported steel increased by 64.5% to 84,41 million tons. From January to April 2015 the main consumer of the Chinese galvanized and coated steel was South Korea. The producers themselves admit that the policy of the Chinese government plays a key role in determining export trends.
 
In Russia the volume of exports from year to year is reduced. In 2012-13 there was a noticeable growth of exports of long  length rolled products, which exceeded the indicators of the imports. However, the main suppliers of flat rolled products in Russia are the Chinese (about 20%).

In 2012, Russia imposed a 5 years of anti-dumping duties on suppliers of coated steel from China: Anshan Steel (12.94%), Shandong Guancheng (8.12%) and others (22.56%), which resulted in a decline in supply of Chinese products in Russia 25.6% in 2012 and by 22.1% in 2013. These measures reduce  the presence of suppliers from China. But, speaking of galvanized and painted rolled in general,it remain difficult for our producvers to compete with the prices of Chinese suppliers.

 The procurement Director  of LLC "MAKSPROFIL" Sergei Bodrov commented that with the  larger number of suppliers and manufacturers of the market, Russian consumers will only win . Considering the accepted anti-dumping measures, the only way out for China  maybe the creation of  joint production on Russian territory. An example of this Sino - Russian "joint company is "Rostekhnologii", one of the leaders in the supply of galvanized steel with a monthly capacity of 25 thousand tons. In addition to the factory in Kovrov (Vladimir region),  the company is planning to include the opening of a plant with a hot dipped galvanizing line in Murom (spring 2015).
The Vice President of Mysteel Yu Ruitai is convinced that in the near future the share of Chinese suppliers in the Russian steel market will not grow, except  the share of galvanized products.  The export of galvanizing products in Russia tends to grow in 2015: from January to April the number had risen to 41.3% in annual terms. Export painted steel increased by 18.5% in annual terms. In General, Chinese suppliers are confident that the construction sector in Russia has huge potential to further grow of demand for steel. Also despite some crisis in the energy sector because of sanctions, the demand for steel pipes will increase in the coming years.
 
 Vadim Dorofeyev, the representative of the Magnitogorsk metallurgical combine, Russia's largest manufacturer stand up for different opinion. He planned that the proportion of Chinese steel market in Russia will grow, particularly in thicknesses up to 0.4 mm. However, the presence of suppliers from China  is subject to control and price regulation. The spokesman said that the main objectives for 2015 is to increase the share on  the domestic market, and also the  extension of product deliveries to remote areas of Russia (far East).

Some Russian users note  that Chinese imports suffer of the lake of quality (zinc content sometimes less than 100 g/m2), and also of frequent cases   of failure in delivery dates. Konstantin Polyakov, Deputy General Director of the Kazan branch of the Kama plant "Metallokrovlia", prefer local raw materials , arguing that the choice is not only the quality, but also the  convenience in logistics.

At the end of the business part of the program the participants managed to establish long-term contacts ,and  scheduled further negotiations for the conclusion of contracts.