Copper: Wire rod – is Russia preparing an international comeback?

Prior to 2015, Russia had been a major force in the international wire rod market before the removal of tariffs on copper cathodes no longer incentivised the domestic production of copper wire rod for both export and domestic use by the Russian wire and cable industry. Output had been as high as 750kt in 2014 before falling to a low of around 400kt in 2017 and then experiencing a small rise last year. Exports slumped from 390kt in 2014 to around 160kt in 2018. Russia has been making a few investments recently, however, aimed at re-invigorating its production for both the local market and for international sale.

KMEZ, the subsidiary of Russian Copper Company (RCC) operating at Kyshtym, Chelyabinsk, last year replaced an old 100ktpy Southwire system with a new and expanded modern Southwire line of 140ktpy at a cost of RUB 288M. As a result of the expansion, the company’s potential rod capacity is now in line with KMEZ’s expanded 140kt capacity for copper cathodes, which resulted from a RUB 380M project completed in the first quarter of 2018. RCC accounts for around 25% of total Russian wire rod production. In the last part of the company’s strategy, KMEZ is investing RUB 3M in a new electro-deposited copper foil plant of 1ktpy capacity to initially serve the Russian market, but with the potential to expand in scale to serve the international market.

In a separate development, RUSKAT of the Tolyatti region has invested in a new Properzi wire rod plant of 24ktpy capacity. This boosts the company’s total wire rod capacity to 48ktpy. An interesting aspect of the investment is that it is a Fire Refined High Conductivity (FRHC) plant using 100% scrap feed (minimum 96% copper content) to cast wire rod. RUSKAT’s existing mill produces rod from copper cathode feedstock.

The combination of these two projects means that Russia now possesses two up-to-date mills with the latest continuous casting technology with expanded nameplate capacity. It is, therefore, likely that Russia will be a more active force in the export market in 2019, faced with only limited growth prospects domestically. Russian wire rod has, traditionally, been priced keenly to ensure it can carve out a market share in third markets.

Roskill’s new report Copper Demand to 2035: Global Industry, Markets & Outlook is due to be published in May 2019. Click here to download the brochure and sample pages, or to access further information.

To discuss the copper market with Roskill, contact Jonathan Barnes: jonathan@roskill.com