• 2022 March 31

    From Whom: Vitaliy Chernov


    About: Metallic voice: Prices undermine civil segment of domestic shipbuilding

    Metallic voice: Prices undermine civil segment of domestic shipbuilding

    - Admittedly, Russia’s civil shipbuilding depends considerably on imports of ship equipment. As for steel, it is produced in Russia and therefore expected to cause no problems. However, steel suppliers are currently overpricing their products offering them at prices exceeding the cost of production two or three times. According to the calculations of the Ministry of Industry and Trade, the cost of hot-rolled steel production is about RUB 45,000 per tonne. According to several steel suppliers’ bills obtained by IAA PortNews from one of the market players, one tonne of hot-rolled shipbuilding steel ranges between RUB 91,000 and RUB 156,000 (which not for long-term supply agreements). Thus, extra charge is 100-200% while normally it is 20%. Amid the pressure of sanctions and the need to build our own fleet while phasing out imports this approach is inacceptable which was clearly expressed by the Ministry of Industry and Trade. With a 20-pct extra charge for hot-rolled steel, its price should not exceed RUB 54,000 per tonne.

    Some market players note that the Ministry’s orders have lead to a 7-8% decrease of metal prices although they are still unacceptably high.

    While everything is clear with imports, pricing of products manufactured within the country is still not transparent. And this issue should be addressed immediately.