Russia's metals exports have plummeted since start of year

Another important component of the Russian economy is experiencing a decline in exports: the metals industry.

Source: The Moscow Times

Details: The first half of 2024 saw a 14% drop in the amount of metals exported by rail. Metals businesses have lost more than 2 million tonnes of exports compared to the first six months of last year, bringing the overall volume down to 13.1 million tonnes.

According to reports, the metals industry is another of Russia’s major raw materials industries that is encountering difficulties with export sales due to tougher US sanctions and a widespread block on bank payments.

TMK, Russia's largest steel pipe maker, has sustained the greatest losses. Exports from its Pervouralsk New Pipe Plant have declined by 21%, while its Chelyabinsk Pipe Rolling Plant and Volzhsky Pipe Plant have seen exports plummet even further (57% and 58% respectively). Alexei Mordashov, the oligarch behind Severstal, has seen his company's exports fall by 24%. Mechel’s exports are down by 23%, and exports from Evraz plants are down 7-20%.

Novolipetsk Steel (NLMK) and the Magnitogorsk Iron and Steel Works (MMK) have lost 4% and 8% of their exports respectively, according to Russian Railways statistics.

The sale of metals abroad provided the Russian budget with US$60 billion, or one-seventh of total export revenue, which the Central Bank has forecast at US$423 billion dollars – US$130 billion less than in 2022.

The Kremlin had expected exports to increase to US$471 billion this year, but that projection was drastically revised downwards in April (to US$428 billion) when Russian enterprises struggled to make payments and attempts to reach an agreement with banks in friendly countries stalled.

Background: 

• The United States and Mexico have announced that further steps are to be taken in the battle against China, Russia and other nations that send products via Mexico, circumventing US steel and aluminium tariffs.
• The Shanghai subsidiary of Russia’s VTB bank and small banks on the Chinese border, through which Russia and China had intended to transfer payments without delay, have placed restrictions on rouble-to-yuan conversions.

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