Page 135 - RusRPTNov19

decreased a bit, falling 1 pp q/q to 49%, while the share of domestic sales reached another record at 91%. The average realized price declined 1.4% q/q, underperforming domestic HRC/CRC benchmarks on the slightly worse sales mix and lower prices for downstream products.
Russia's largest steel pipe maker TMK reported a decline in seamless pipe shipments of 4% quarter-on-quarter to 0.65mn tonnes in 3Q19, while the welded pipe sales fell by 15% q/q to 0.29mn tonnes. The report follows weakness in other metals and steel names such as NLMK and MMK . As reported by bne IntelliNews, TMK in particular is seeing additional pressure from increased competition in the seamless steel segment. BCS Global Markets attributed the decline in seamless segment in 3Q19 to to weak demand in North America stemming from unstable oil price, decreased drilling activity, and high pipe inventories. Also, seamless pipe shipment decreased due to maintenance works in Russia and seasonally weaker economic activity in Europe. In the welded segment, the decline was also due to weak US demand as well as declined large-diameter pipe shipments in Russia.
Igor Zyuzin of indebted metals and mining major Mechel reportedly asked for state support in the ongoing restructuring of the debt to Russia's largest state-controlled banks and for the loss of a steel plant in Eastern Ukraine, Vedomosti d aily reported. As reported by bne IntelliNews, Mechel renewed negotiations with its main creditor banks , doubting its ability to service debt in 2020. The company also has to recover the stake in its main mining asset Elga from Gazprombank under the risk of having it sold to third parties. Reportedly, the refund requested from the government relates to the Donetsk Electrometallurgical Plant, bought by Mechel for more than $500mn in 2009, but seized by pro-Russian Donetsk People’s Republic local authorities in 2016 during the war with Ukrainian government forces in Eastern Ukraine.
● Fertiliser
Russian fertiliser major Uralkali signed potash supplies deal with Indian IPL until March 2020 , noting that the contract is drawn on current market prices, Reuters and Kommersant daily reported on October 25. The volume of the supplies is undisclosed, but the price is set at $280 per tonne, which is $10 below the contract of last year, Interfax reported citing unnamed sources close to the deal. Analysts surveyed by Kommersant remind that the price of the first long-term contract with India or China, the largest potash consumers, is likely to become the benchmark price for the upcoming season. Despite the $10 dip in the price, in 2018 the price spiked by $50-60.
Russian fertiliser major Uralkali plans to invest $1.4bn through 2025 on new projects, out of the total investment programme of $3bn, Vedomosti d aily reported on October 7 citing the presentation to Eurobonds issued by the company. Reportedly, by modernising existing capacities and launching new ones Uralkali plans to boost potash output by 23%. The reports of the ambitious investment programme come amid warnings that Uralkali and another fertiliser major Uralchem are on the brink of insolvency . As reported by bneIntelliNews, areportreleasedinOctoberbytheMoscowCentrefor Analytics, Research, Strategies and Technologies (ARST) claims that both companies are facing bankruptcy in the coming year. The two companies are controlled by controversial businessman Dmitry Mazepin, who has allowed them to build up over $11bn of debt that is more than value of the companies' assets and both companies are running at a loss and will struggle meet debt
135 RUSSIA Country Report November 2019 www.intellinews.o