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The celebration came at an uneasy time for Russian steel producers, whose margins have been falling under pressure from lower domestic and export prices and volumes, as well as rising costs.
Russian steelmakers, however, have so far refrained from significant cuts in production volumes or staffing, and was itself another reason for the weekend’s celebration.
Expectations of more difficult market conditions to come hung in the air, however, and some companies have already started to prepare their workers for tougher times ahead.
Severstal owner Alexei Mordashov, for example, recently told his company’s workers in a letter that the steelmaker plans to cut its general and administrative expenses by 20% in 2013, and has asked employees to cut their expenses on an individual basis.
Despite the difficulties, though, Russian steelmakers have not broken the tradition of opening new production facilities around the time of the Day of Metal Workers.
Steel and coking coal producer Mechel last week launched a universal rolling mill in the Russian city of Chelyabinsk, in the presence of the prime minister Dmitry Medvedev.
The $715 million mill, which took five years to build as the company slowed down construction because of poor market conditions, can produce 1.1 million tpy of rails and structural steel.
Picture: Metal Supply & Sales
Russia’s metals industry, both ferrous and non-ferrous, plays an important role in the country’s economy, despite the fact that it contributed as little as 4% of GDP last year.
About 80% of the country’s metal-producing facilities are the major employers in the cities and towns where they are located. The average monthly after-tax salary for a metal industry worker last year stood at 34,100 roubles ($1,053), according to Metal Supply & Sales magazine.
“The metal industry’s development is one of the most important factors in our state’s prosperity,” minister of industry and trade Denis Manturov said in a note of congratulations to the industry. “The metal industry is a pillar [of strength] that has been and is of great help to our Motherland in difficult times…”
The celebratory events over the weekend included pop-music concerts, competitions with prizes such as microwave ovens and electric kettles, and fireworks displays. British singer-songwriter Sting will appear later this week in Chelyabinsk, which, besides being home to Mechel’s new steel production complex, also hosts a tractor plant and a pipe mill.
Chelyabinsk lies in the Southern Urals steelmaking region, where factories were built between the 1920s and the start of the Great Patriotic War in 1941.
Russia is today world’s fifth-largest steel producer but, according to the Great Soviet Encyclopedia, it was the biggest ferrous metals maker globally between the middle of the 18th century and the start of the 19th century.
More than 1 million people around Russia and other former Soviet Union states celebrated the Day of Metal Workers this past weekend, introduced in 1957 to mark the importance of the metal industry to the USSR’s economy.