A good post. Most people do not appreciate the success of the Russian steel industry in post Soviet modernisation. As for stagnation in demand. The Russians have now discovered that military keynesism works. Post war all they need to do is switch say 2% of gdp to spending on infrastructure (roads, rail, electricity grid , gas pipelines and heating) instead of military spending and they should get a 10% increase (say 4 to 5 million tonnes per annum) in demand over next 10 years. So slow growth rather than stagnation. As for exports, due to transport costs Russia should still remain competitive against China in Central Asia, Turkey and the middle east. Finally - decarbonization. CBAM applies to everyone and China for example has a much more carbon intensive steel industry than Russia does. Furthermore Russia's huge reserves of cheap natural gas give it a competitive advantage for production of direct reduced iron (DRI) at much lower emission levels . Likewise actually for the United States and Iran. The current target price for Green Hydrogen is US$2 per kilogram in 2030 and US$1 per kilogram in 2040. However US$1 per kilogram equates to US$8 per mbtu. That is below the current Dutch TFF price of approximately $US10 per mbtu but well above the current Henry Hub price of approximately US$3 per mbtu and above the estimated wellhead prices of natural gas in Iran and Russia of approximately US$2 per mbtu. So given the substantial gap between the current natural gas production costs in the US, Russia and Iran and Green Hydrogen targeted costs then Blue Hydrogen could be quite competitive in those countries depending on the CCS costs. So overall, I think post Putin there is reason to be quite optimistic about the Russian steel industry.
A good post. Most people do not appreciate the success of the Russian steel industry in post Soviet modernisation. As for stagnation in demand. The Russians have now discovered that military keynesism works. Post war all they need to do is switch say 2% of gdp to spending on infrastructure (roads, rail, electricity grid , gas pipelines and heating) instead of military spending and they should get a 10% increase (say 4 to 5 million tonnes per annum) in demand over next 10 years. So slow growth rather than stagnation. As for exports, due to transport costs Russia should still remain competitive against China in Central Asia, Turkey and the middle east. Finally - decarbonization. CBAM applies to everyone and China for example has a much more carbon intensive steel industry than Russia does. Furthermore Russia's huge reserves of cheap natural gas give it a competitive advantage for production of direct reduced iron (DRI) at much lower emission levels . Likewise actually for the United States and Iran. The current target price for Green Hydrogen is US$2 per kilogram in 2030 and US$1 per kilogram in 2040. However US$1 per kilogram equates to US$8 per mbtu. That is below the current Dutch TFF price of approximately $US10 per mbtu but well above the current Henry Hub price of approximately US$3 per mbtu and above the estimated wellhead prices of natural gas in Iran and Russia of approximately US$2 per mbtu. So given the substantial gap between the current natural gas production costs in the US, Russia and Iran and Green Hydrogen targeted costs then Blue Hydrogen could be quite competitive in those countries depending on the CCS costs. So overall, I think post Putin there is reason to be quite optimistic about the Russian steel industry.
Thanks - this provides great insight into how differently the Oligarchs in this sector rose to power.