Page 138 - RusRPTFeb23

However, the automotive industry saw a 42.3% decrease in demand, mechanical engineering saw a 20.8% decrease, while the energy sector saw a 36% increase in metal consumption and the construction sector saw a 1.2% increase.
According to the World Steel Association, steel consumption in Russia is expected to fall by 20% to 35.1mn tonnes in 2022. The NLMK Group predicts that steel production in Russia will decrease by 15% to 59.6mn tonnes. In order to address these issues, the Russian Steel Association has suggested increasing domestic consumption as a potential solution.
Russia’s coal production edged up by 0.3% in 2022 in annual terms,
Deputy Prime Minister Alexander Novak said at a government meeting headed by President Vladimir Putin on January 11. "Speaking about 2022, coal production rose by 0.3% by the end of the year despite the fact that coal supplies to Europe were embargoed starting August 10," he said. Meanwhile, coal exports from Russia dropped by 7% in 2022 compared with 2021, though deliveries to the domestic market gained 8%, Novak said. "[Domestic supplies] rose by around 8%, while exports lost 7%," he said. TAGS
PhosAgro CEO Mikhail Rybnikov wrote a letter to President Putin asking for a change to the parametres of the fertiliser export duties that were set in November, including a reduction to the cut-off price (used to determine the duties) for nitrogen and potash fertilisers.
According to Rybnikov, the current export duty mechanism disadvantages more technologically advanced suppliers of complex and phosphate fertilisers, which are higher-end types of fertilisers. Rybnikov said that the parametres of the export duties were approved without taking into account aspects such as processing depth and the profitability of different types of fertilisers. He asks in his letter to have export duties incorporate a base level of profitability, which would differ for different types of fertilisers. According to Interfax's sources, Putin has instructed the Russian government to consider PhosAgro's proposal.
Export duties are currently set at 23.5% of the difference between export prices and a cut-off price of $450/tonne for all types of fertilisers. Nitrogen fertiliser prices have decreased in January (for example, urea FOB Baltic has dropped to 19% below the November level), so now some types of nitrogen fertilisers are quoted below the cut-off price of $450/tonne. This is largely because of the unusually warm winter in Europe, which has driven a decline in prices of natural gas, which is the main raw material used to produce nitrogen fertilisers. For example, Dutch TTF natural gas futures have fallen 48.2% since November. The latest available prices (FOB Baltic) for urea (one of the main types of nitrogen fertiliser) and potash are $413/tonne and $546/tonne, respectively, while NPK and MAP are quoted at $620/tonne and $613/tonne. The higher prices for the latter fertiliser types mean a wider gap to the cut-off
138 RUSSIA Country Report February 2023 www.intellinews.com