In November 2021, global steel production continued to fall

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AK&M 20 January 2022 14:06

In November 2021, global steel production continued to fall. According to the World Steel Association (WSA), 143.3 million tons of steel were smelted during this period — 9.9% less than in November 2020, and 1.6% less than in October 2021. This is stated in issue No. 1456 of the monthly bulletin "Branches of the Russian economy: production, finance, securities. Ferrous and Non-ferrous Metallurgy" of the AK&M News Agency.

This indicator has become the lowest since April 2020. In just 11 months of 2021, 1.752 billion tons of steel were smelted in the world — 4.5% more than in January-November 2020. According to the forecast of the British MEPS, by the end of 2021, global steel production will add about 3.4% compared to a year earlier and will reach 1.94 billion tons. Growth will continue in 2022, although at a slower pace.

In January-November 2021, Russia increased steel production by 7.1% to 69.7 million tons compared to a year earlier, retaining fifth place among steel-producing countries (according to the WSA). In the USA during this period, metal production increased by 18.9% to 78.8 million tons. Japan increased smelting by 16.8%, South Korea - by 5.6%, India - by 19.3%, Turkey - by 13.4%. At the same time, China reduced steel production by 2.6% to 946.4 million tons, Iran - by 3.4% to 25.7 million tons.

The US and the EU have settled a dispute over duties on steel and aluminum imports imposed by ex-President Donald Trump. In October, the United States reached an agreement with the European Union to establish a tariff quota, or TRQ, for steel imports from the region, the change came into force on January 1. The TRQ quota system will replace the existing tariffs of 25% for steel and 10% for aluminum. From now on, the 25% duty on steel ceases to apply to companies from the EU, but the quota for supplies from this region remains. The total annual volume of imports within the framework of TRQ is set at 3.3 million tons for 54 product categories. TRQ will be used for products from the EU, but other countries, including Japan and the UK, are already negotiating to include their products in the TRQ system.

The average annual price of base non-ferrous metals for some items has almost doubled compared to 2020. This is due to the growing demand for a number of non-ferrous metals, in particular aluminum, due to the introduction of export duties by Russia. Also, the non-ferrous metals market was seriously affected by the energy crisis affecting China and the EU. Electricity prices rose to record levels due to a lack of generation, which affected the production of zinc, aluminum, other metals and alloys. Thus, the average price of aluminum on the LME in December increased by 2.4% compared to November to $2698.1 per ton. As of January 14, the metal price was $2977.25 per ton. In general, in 2021, the average price of aluminum increased by 45.4% compared to a year earlier.

The Russian government has postponed consideration of the initiative of the Ministry of Finance of the Russian Federation on linking the income tax rate and dividends of metallurgical companies over the past 5 years. Recall that the Ministry of Finance in September proposed to raise the income tax from the current 20% to 25-30% for those companies that have paid more dividends than invested in the last 5 years. By increasing the tax burden for metallurgical companies, the government planned to attract an additional 546 billion rubles to the budget in 2022-2024. However, now the authorities and business have agreed that the discussion of this option of tax changes will continue and they will not be introduced yet. At the same time, export duties on metallurgical products introduced in 2021 on a temporary basis will not be extended after January 1, 2022, First Deputy Prime Minister Andrei Belousov said.

Read more about the results of the ferrous and non-ferrous metallurgy market in November 2021 in issue No. 1456 of the monthly bulletin "Branches of the Russian Economy: production, finance, securities. Ferrous and Non-ferrous Metallurgy" of the AK&M News Agency.