The massive nosedive in American metals imports comes after Washington, D.C. released its latest list of Russian goods targeted by massive import tariffs in late June. These are part of America's economic sanctions against Russia for the special military operation in Ukraine. The list of items with steep tariffs includes steel and several types of steel products. (Related: America has imported over $6 billion worth of goods from Russia since the start of Ukraine invasion.)
The tariffs were passed following the Group of Seven nations' revocation of Russia's trade status as a "most favored nation" in response to the conflict in Ukraine. The status guaranteed low tariffs on Russian goods sold globally since 2012, when the country gained the status.
Earlier reports even suggested that America didn't want to just place tariffs on Russian steel but to outright ban its export to the United States.
Last year, U.S. imports of Russian ferrous metals – which include cast iron, iron, steel and rolled metal – amounted to $2.77 billion, for an average of $230 million per month. The U.S. at the time was the destination for nearly nine percent of all Russian exports of ferrous metals.
Since then, ferrous metals exports from Russia have been on the decline. During the first half of 2022, Russia exported more than $1 billion worth of ferrous metals to the United States. In June alone, America received around $201 million worth of exports, around half of which – $112.5 million – was in ferroalloys.
The prohibitive cost of continuing to export steel to the U.S. prompted Russian manufacturers to reorient themselves toward alternative markets in Europe and Asia.
In June, Turkey purchased $546 million worth of ferrous metals from Russia – a significant increase from previous months.
China has also ramped up its purchases of Russian iron and steel. In June, the communist nation purchased $163.5 million worth of metals and in July, China more than doubled that to $337.4 million. This is nearly four times the amount of ferrous metals China imported from Russia in July 2021, when it bought $84.5 million worth of iron and steel.
According to Fastmarkets pricing agency, Mexico and Taiwan are becoming major sales markets for Russian steel following the disappearance of most Western trade. More Russian iron, steel semi-finished products and rolled steel are heading to India and the Middle East.
According to Indian customs, imports of Russian ferrous metals in July surged to nearly 30,000 tons – more than five times India's previous ferrous metals imports from Russia.
The Ministry of Industry and Trade of the Russian Federation (MITRF) reported that the share of the Asian states that received metals exports topped 50 percent in August compared to just 10 to 20 percent in earlier records. Russian companies are also selling metals at significant discounts of 25 percent or more to attract new buyers.
At the current rate of new exports, the MITRF predicted that it will only take around eight years to restore metals export levels to those seen in 2019 and 2020. The volume of sales of goods both to foreign countries and to domestic markets will also be able to grow to the values seen before 2020 within around eight years.
To restore previous export levels quicker, the MITRF noted that companies will need to redirect their attention to the burgeoning markets in East Asia and the Middle East.
Learn more about the collapse in the steel trade at MarketCrash.news.
Watch this episode of the "Health Ranger Report" as Mike Adams, the Health Ranger, discusses the massive global shutdown of metals smelting operations, including steel.