ThyssenKrupp quits carbon steel trading in Russia

German steelmaker ThyssenKrupp AG's Russia-based trading company is quitting the carbon steel sector due to the drop in the business's margins, two local trader sources told Steel First on Monday January 27.

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The company, OOO ThyssenKrupp Materials, will retain its trading in stainless steel, the sources said.

The trader plans to gradually stop purchasing carbon steel products for reselling in Russia, due to the low margins the market saw in 2013, one of the sources explained.

ThyssenKrupp confirmed the news later in the day.

“We do confirm that we have started downsizing measures within this subsidiary locally,” ThyssenKrupp spokesman Stefan Ettwig wrote in an e-mailed comment. “For this reason, we will close our carbon steel activities on site before long.”

“ThyssenKrupp Materials Russia will continue its stainless steel business, market presence in Russia is still given,” Ettwign added.

OOO ThyssenKrupp Materials has been trading uncoated hot-rolled and cold-rolled flat steel products, long steel products, pipes, and a wide variety of stainless steel products made locally, as well as in the rest of CIS, Europe and Asia.

Both flat and long steel product domestic prices in Russia were last year negatively affected by the over-supply and, at times, lack of finance in the market. The flats were also pressurised by the weak demand.

Steel First’s assessment of 4mm hot-rolled sheet slid to 19,300-19,800 roubles ($563-$578) per tonne cpt Moscow including VAT at the end of 2013, from 20,740-20,900 roubles ($605-$610) per tonne cpt Moscow as of September 2, when the assessment for the product was first published.

Steel First’s assessment of 12mm rebar dropped to 20,200-20,500 roubles ($589-$598) per tonne cpt Moscow including VAT at the end of the year, from 23,000-23,900 roubles ($671-$698) per tonne cpt Moscow as of September 2, when the rebar assessment on the cpt basis was started.

OOO ThyssenKrupp Materials has been operating in Russia since June 2004. The company’s website says it counts the country’s largest companies in the construction industry, machinery-building, utility and energy sectors, as well as the largest enterprises in the chemical and food industries, among its customers.

The company has got branch offices in Moscow, Smolensk, Oryol, St.Petersburg, Nizhny Novgorod, Kazan, Ryazan, Yekaterinburg, Cheboksary and Novosibirsk.