Conference «RAW MATERIALS IN METALLURGY: sales, production, logistics»

The key changes and new trends of the global and domestic commodity markets were addressed on 6-7 April 2023 in Moscow during the conference «Raw Materials in Metallurgy: Sales, Production, Logistics», partnered by the MMI (Metals&Mining Intelligence) information and consulting agency.

Shifted exports and new logistical challenges for Russian companies amid the geopolitical climate changing since 2022 was one of the key topics. Its urgent imperative drew many delegates from the mining, metallurgy and financial sector representing different Russian regions as well as partners from the metals industry of Asia and Africa.

The first day of the conference began with a session on coking coal, with speakers from MMI, SUEK and Gazprombank focusing on changes in the global coking coal market, prospects for the Russian suppliers and analysing how the shipment logistics had had to be reinvented over the past year. Delegates from the leading coal miners (SUEK, ELSI, Raspadskaya) and metals companies (Magnitogorsk Iron & Steel Works, IMH) gave an overview of how the transport efficiency can be improved within the existing infrastructure capacities. The dominant discussion revolved around shipping to the East, with the railway capacity still insufficient to handle all exports of the coal companies. Shipments from Baltic and Southern ports to Asian markets are increasing as a result and the high logistics costs are driving down the companies’ profits significantly. Besides, the shipping priority is often given to higher added value products. Delegates from the metals companies also brought into focus a number of challenges they are facing when taking their products to export markets.

The next session hosted a discussion on the domestic and export markets for iron ore raw materials and ferroalloys. Delegates from such Russian majors as Severstal, IMH, SUEK, Metalloinvest, EVRAZ, and NLMK talked about new domestic pricing principles and the implications of contracting without formula pricing or links to international quotations, also paying heed to the consequences of reducing export supplies and reorientating flows of raw materials to the new markets. Much debate was generated by the search for new formula benchmarks for long-term contracting that should duly reflect the specifics of the «commodity basket» and the volatility of steel products markets.

The third session addressed transboundary metallurgical projects and development of cooperation among the CIS countries. Delegates of Kazakhstan, Uzbekistan and Turkmenistan offered a review of the projects aimed at boosting production and highlighted the opportunities for joint participation in such investment projects. Finance experts from VTB and Otkritie Bank brought into review the outlook and risks of investing in transboundary projects and pointed out key specifics of project financing in the Russian context. They also broached the pressing matter of procuring and servicing equipment for the mining and steel industry as the cooperation with a number of long-established foreign equipment manufacturers had been disrupted and touched upon the specific nature of EPC-projects.

The second day of the conference was kickstarted by the delegates from the metallurgical industry of China, India, and Egypt sharing their views on the changes in the global market as a whole as well as in their respective domestic markets. The delegate of the Indian Steel Association presented a detailed analysis of the development of the Indian steel industry and fielded questions on opportunities for further cooperation with Russian companies in sourcing raw iron materials. The representative of Elmarakbysteel, Egypt, provided a detailed analysis of the economic environment in his country and the role of the Egyptian steel industry in the region. It was noted that Russia remained the most future-proof supplier of raw materials and metal products to the region due to their favourable logistics and quality. The delegate from the China Metallurgical Industry Planning and Research Institute highlighted the global leading role of Chinese metallurgy and elaborated on China's metallurgy development outlook. The «green» metallurgy policy, minimizing the reliance on imports of raw materials, boosting the share of electrometallurgical production and domestic scrap collection were emphasized as the principal development milestones.

The final session centred around the smelting freight logistics – the lively discourse was driven by the industry players (IPEM, IEDT, MORSTROYTECHNOLOGY, FESCO and RZD Logistics). The experts talked about the changing loading capacity of the port and railway infrastructure over the past year, looked into the impact of future projects, and highlighted the projects of expanding the receiving and transshipment capacities of the Russian ports for the metallurgy raw materials cargoes. Special consideration was given to how the problems of inbound and outbound smelting logistics can be solved using digital services.