UMMC will help Russia reduce the import of copper sheets by 5-6%

Enterprises of Iskander Makhmudov have increased production of copper sheets by 40%, but this is still not enough. 70% of this kind of products in the Russian Federation are still imports.
In 2017, Russia produced 978,000 tons of copper. The main producers are Norilsk Nickel and the Ural Mining and Metallurgical Company (UMMC), they account for almost 40%, the Russian Copper Company occupies 19%.

About 77% of Russian copper is exported (the main markets are the Netherlands, Greece, China), most of it is copper raw materials, cathodes.

The peculiarity of the Russian copper market is that the country exports raw materials and buys ready-made copper products at inflated prices, explains Maxim Khudalov, director of the corporate ratings group of ACRA. So, according to him, the import price of 1 ton of copper pigs does not exceed $ 6,500, and 1 ton of flat copper rolled is worth $ 10,000. "It is much easier to trade copper raw materials than finished products, as it is supplied to the stock exchange and does not require certification," - he says.

In the share of Russian imports of copper products, 44% falls on the copper plate, the rest - wire rod, rods and wire.

Russia consumes 100,000-110,000 tons of copper sheets, of which 70% is imported products, mainly from Kazakhstan, Iran, Chile.

80% of the Russian copper plate production is accounted for by UMMC, the rest is distributed among small factories (Arlan-met, Grif, Mekom, Svityaz, Metal-Kit, Elekmet).

UMMC reported that the Kirov Non-Ferrous Metals Processing Plant (KZOTSM, part of the group) increased copper sheet production by 40% in two months in 2018, compared to 2017. The copper sheet is also produced at the company's plant in the Sverdlovsk Region. This trend was outlined in the second half of 2017 and is associated with an increase in demand for this type of products, the company said. The copper sheet is used for the production of radiators, household appliances, electrical appliances, roofing and bearings. The representative of the company did not respond to the request of Vedomosti.

According to the report for 2016, KZOTSMe produced 10,000 tons of copper rolled products. Khudalov believes that production last year remained at the level of 2016 (for 2017, UMMC did not report). It turns out that for two months UMMC increased production of a copper sheet by 4,000 tons, which is 5.7% of Russia's imports (about 2.1 billion rubles), he estimated. Reducing the share of copper sheet imports will allow Russia to reduce dependence on foreign suppliers and ensure the growth of the tax base, the expert continues. The cost of imports of copper rolled is 35 billion rubles, according to ACRA.

The dynamics of the Russian and global copper markets in 2018 will be positive, experts at the Gazprombank Economic Forecast Center believe. The main driver of production growth will be electric vehicles. Expected contribution of demand from automakers will be at least 20% of the total increase in copper consumption in 2017-2027, analysts say. The market is fairly balanced and this year it is possible to repeat a slight deficit, says Aton analyst Andrei Lobazov.