Global Steel Trade; Structural Problems and Future Solutions

• Domestic demand for hotrolled
sheet dropped nearly
77 percent between 1991
and 1998 (Chart 3-14).
• Production for sale of hotrolled
sheet, after declining
nearly 50 percent between
1991 and 1993, increased to
levels nearly on par with
levels prior to the Soviet
break. 143
• In 1998, more than 80
percent of Russian hotrolled
sheet production was
exported, the majority of it
going to the United States.
In 1998, the United States
consumed 57 percent of
Russia’s total production of
hot-rolled products. 144
Metric Tons (millions)
5
4
U.S.
3
2
Asia
1
0
1996 1997 1998
Source: Infomine.
3-13. Russian Exports of Hot-Rolled Products to the U.S. and Asia
The average unit value of these
imports of carbon hot-rolled
products was on average
approximately 20 percent lower
than the imports of any of the
other major country suppliers.
Steel experts have given several
reasons for the low price
received by Russian steel
producers, including the
following:
• Poor quality.
• Long lead times and
delivery time uncertainty.
• Prepayment requirements.
• Lack of downstream
subsidiary outlets in other
countries.
• Reliance on Russian
Metric Tons (millions)
6
5
4
3
2
1
0
1991 1993 1995 1997
Source: WSD.
Production
App. Consumption
Imports
Exports
3-14. Russian Production, Consumption, Imports, and Exports:
Hot-Rolled Sheet
middle-men and small trading companies rather than well-established major international trading
companies.
• The failure to produce upgraded products and limited product range.
• The lack of technical assistance. 145
Quality shortcomings included problems with packaging and transportation damage and unsuitableness
for certain end uses (such as automobile manufacturing) because of failure to meet important surface
quality requirements. 146 The major end users of Russian hot-rolled products have been U.S. pipe
producers and other consumers who do not require products of greater strength or smoother and cleaner
surfaces. 147
Chapter 3: Behind the Crisis—Russia 61