Asian Steel Markets Hit by Inflows of Cheap Russian Metal

Unusual flows of cheap Russian products are roiling corners of the steel trade in Asia, weighing on prices and prompting one key regional producer to warn of possible trade counter-measures.

Russia is trying to send more steel eastwards after sanctions blocked major western markets while war in Ukraine disrupted Black Sea exports, according to Asian steelmakers that monitor trade across their region. The increased volumes are set to pile pressure on markets already suffering amid China’s demand slowdown.

Taiwan’s China Steel Corp. is gathering evidence in case it needs to take steps “against unfair trade behaviours,” it said on Monday. China could turn to discounted steel from Russia when its import demand recovers, instead of importing products from Asia, according to Japan’s Tokyo Steel Manufacturing Co.

While much smaller in scope, the shifts in the steel trade carry echoes of other markets from coal to crude oil, with Russia seeking new buyers in the face of international sanctions or boycotts. Much of the country’s surplus steel, especially the semi-processed product known as billet, flowed to Turkey. But Russian steel mills are now also pushing to sell at lower prices in China and other Asian destinations.

For Tokyo Steel -- which produces the alloy from scrap metal -- the appearance of Russian products is favorable because of the knock-on effects on the region’s scrap prices.