What are the condition and prospects of the Russian market of metal structures?
Steel construction in Russia is growing popular though its volumes stay rather modest yet. The exhibition called Metal structures 2017 with the conference “Steel structures: condition and prospects” showed the main trends of the industry. Experts think, that though the situation in the country is far from being simple, the volume of metal structures consumption will grow, and rather rapidly.
The market boundaries
According to the information by the Steel Construction Development Association, in 2016 Russia produced about 2.1m tons of metal structures for the construction of buildings and infrastructure objects (7.7% more than a year before). 2m tons of light steel thin-walled structures (LSTS) from zinc-coated steel and 1.4m tons of other steel structures.
It is not actually so much if compared with more than 60m tons of cement or 20m m2 of reinforced concrete that were produced and used in Russia last year. However, metal consumption in construction has an evident tendency to expand. , Metal structures suppliers and metallurgists intend to struggle for selling markets looking for new niches.
On the whole, the Metal structures 2017 exhibition’s participants (more than120 producers and suppliers) admitted that the current condition of the Russian economy does not raise optimism. The decrease in the construction industry continues, potential customers often do not have money, the volumes of the state financing have reduced and are not going to increase.
Against this background, the construction of sports and other objects for the Football World Championship 2018 is being completed. And it is sports - Olympic construction objects and football stadiums - that gave an impulse to the Russian industry of metal structures.
On the whole, Russian producers do not see any reasons for a fall and do not exclude the production efficiency growth in the future.
What headlines might become a new source of growth on the Russian market of metal structures? Experts mention the oil and gas industry. Presently, work is going on at the ZapSibNeftechim petrochemical complex of the Sibur company in Tobolsk and Yamal-LNG. New projects of deep updating of oil processing plants and construction of LNG terminals are being developed.
One more prospective headline is the infrastructure construction. Despite financial difficulties and failure to meet the deadline, the CRR project is being implemented in the Moscow region. A decision on the construction of the Eastern speed highway in Saint-Petersburg has been taken. Soon, the work at the construction of the Moscow – Kazan high-speed line will be started. Chinese companies will take active part in the designing and construction. When in China such roads are usually constructed elevated, this is likely to increase the demand for metal structures.
Russian companies continue investing significant finance in logistics. Metal structures are used in the construction of large trade centres in the suburbs of big cities.
Companies dealing with LSTS do not notice any decrease, in fact. From their standpoint, the market is growing rather fast. Lately, they have a great number of orders for metal structure supply for the construction of green houses, cattle farms and other agricultural objects.
To put it shortly, metal structures producers actively develop industrial, agricultural and logistics construction, and in the infrastructure sector their positions have initially been dominating. However, one might notice the market participants’ intention to enter the largest market sector of housing construction.
According to RBC’s information, about 13% of buildings in Russia are built with the application of metal structure technologies, whereas in the USA, Great Britain and some Scandinavian countries this index is over 60%. The share of LSTS in the Russian housing construction is not large. According to the information of the “Russian Steel” non-commercial partnership, including all leading Russian metallurgic groups, it is only 0.5%. And in Britain, America, Scandinavia, Germany it may achieve 5—20%.
Thus, Russia has wide opportunities to expand the use of metal structures application in the housing and social construction. And the suppliers of this production intend to struggle for the market seriously. The best-case scenario, claimed by Director General of the ARSS, Dmitry Yeremeev, includes 20% takeover of the high-rise construction market, which will provide for the increase of metal structures consumption in this sector up to 6m tons a year.
A number of projects realized in Tatartstan and Novosibirsk prove the tendency. And the metal structure producers gradually overcome their main problem — the lack of the regulative base and application experience. When last June many participants spoke on the lack of necessary standards at the conference on steel structures, this year such complaints are fewer.
New national and international standards on hot-dip-galvanised rolled metal and polymer covered roll metal have been introduced during this year, as well as LSTS code of practice. New regulations are expected to appear to expand the opportunities of the steel construction technologies application.
As many participants of the exhibition noted, the insufficient regulation base is one of the most important factors restraining the use of metal structures and LSTS in construction. However, it is being actively developed and increased. Producers work much with young specialists training them to use new technologies. In particular, projects with the use of LSTS are prepared in the Kazan architecture and construction university.
A number of metallurgical companies take part in the promotion of steel construction technologies, being interested in the expansion of their sales markets. They increase the output of steel products for the metal structures producing plants, offer new technological solutions
So, the production of metal structures and steel construction on the whole remain growing industries, and in the coming years the growth rate is sure to increase. Zinc-coated LSTS, welded and rolled bars and beams become more wide-spread and demanded construction materials.
Victor TARNAVSKY, analyst