Sanctions to Hit Russian Steel Mills Maintenance & CAPEX

Russian Kommersant reported that Russian metallurgists are critically dependent on foreign key equipment including rolls for rolling mills and due to Western sanctions will be forced to look for workarounds to purchase it or switch to lower-quality analogues. Russian Ministry of Industry & Trade draft industry development strategy prepared till 2030 says that almost all equipment along the entire value chain comes from unfriendly countries & underlines that the process of import substitution may take at least ten years.In particular, in Russia there are practically no technologies for the production of high-quality refractories for blast-furnace and steel-smelting industries. Almost all of their types are imported from abroad, and those produced in Russia do not meet international standards.In addition, Russia lags behind the world leaders in technologies of the steel sector, equipment for the redistribution of the sintering cycle, in rolling mills, galvanizing lines, polymer coating lines, and heating furnaces are not produced. The production of rolls for rolling mills, which have been mostly imported recently, has practically been lost.The document notes that Western suppliers refuse to work with Russian companies. Metallurgists will have to partially buy inferior equipment in Asia. Another problem is that Western companies whose equipment is used in the metallurgical industry have refused to carry out maintenance.It is difficult to replace such equipment, which will lead to the suspension of investment projects. Evraz announced on 4 August that it had extended the modernization of the rail and beam mill at Evraz NTMK by one year due to problems with the supply of equipment. The CAPEX of the project was estimated at USD 210 million.The Ministry of Industry & Trade told Kommersant that there are competent manufacturers of equipment for the metallurgical industry in Russia. A number of enterprises produce heating, melting, thermal furnaces, as well as foundry and rolling equipment. The production of mining and processing equipment is carried out at such enterprises as IZ-KARTEKS, Uralmashzavod, TYAZHMASH, Drobmash and others.

Sanctions to Hit Russian Steel Mills Maintenance & CAPEX

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