Rising of steel and copper prices is good for Serbian exports

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Smederevo Ironworks announced that it would start the second furnace on August 16, which was in a “quiet operation” mode for a year due to reduced demand caused by the pandemic and the quota for steel exports from Serbia to the European Union. According to the short-term forecast of the World Steel Association, the demand for this type of iron should increase in the current year by 5.8 percent and reach 1,874 million tons, after falling by 0.2 percent in 2020. As demand grows, so does price. It is similar with copper.
Bojan Stanic, assistant director of the Sector for Strategic Analysis of the Serbian Chamber of Commerce, says that since the beginning of the year, the price of industrial metals on the world market has been rising significantly, by about 20 percent. This is a consequence of the economic recovery of the economy after the recession in 2020 caused by the corona virus pandemic. Copper and steel are the basic raw materials used in the industry, which in 2021 is the driver of economic recovery.
In the first five months of this year, the export of copper from Serbia to the world compared to the same period in 2020 increased by about four percent, while the value in euros increased by 46 percent (as a result of rising copper prices on the international market). On the other hand, in the same observed period, steel exports decreased by about seven percent in volume, but increased in value by about 26 percent (also due to rising raw material prices).
– The export of steel and copper to the EU has been reduced in quantity by 19 and 1.3 percent, while due to the higher price it has increased in value by 16 and 35 percent. However, the fact is that the export of industrial metals to the EU is relatively declining, bearing in mind that the EU’s share in the total world export of these industrial metals from Serbia is decreasing. For example, the value share of the EU dropped from 81 to 74 percent in total steel exports, or from 44 to 40 percent in terms of copper. This may be related to the EU customs policy, but we should also keep in mind the growth of demand on markets outside the EU – states Stanic.
According to him, when it comes to production in Serbia, it is noticeable that it is growing in the first five months of this year, with a relatively good realization on the foreign market. Also, new investments in production facilities are encouraging in terms of the medium-term perspective of this economic activity.
However, as he emphasizes, it should be borne in mind that the extension of EU quotas on steel imports from Serbia will reduce our country’s export potential in the current year, while new regulations related to carbon dioxide emission control (decarbonization) may have an impact on medium and long term the perspective of Serbia’s exports, especially when it comes to industry.
The company Serbia Zijin Copper, which is currently our largest exporter, achieved better results than the ones it committed to in the contract with the Government of Serbia, said the Minister of Economy Andjelka Atanaskovic recently.
– Bor used to be the sixth exporter of copper in Europe, and judging by the results achieved by Zijin today, next year it will most likely be the second exporter of copper in Europe – the Minister pointed out, and the company said in a statement.
The general director of Serbia Zijin Copper, Jen Siming, said that in the first half of 2021, 30,100 tons of cathode copper were produced, which is 11.83 percent more than in the same period last year.
– The amount of gold produced was 691.17 kilograms, cathode copper 35,400 tons, sales revenue was 492 million dollars, which is a year-on-year growth of 76.91 percent – added Jen Siming.
He emphasized that Zijin, since it took over the management function, until the end of June this year, the company produced 189,500 tons of cathode copper, 3,417 kilograms of gold and 19,235 kilograms of silver.
– During the previous two and a half years, we realized sales revenue in the amount of 1.708 billion dollars, so this year we took the first place on the list of exporters in Serbia – he said.
According to him, the Strategic Partnership Agreement with Serbia specified that Zijinj will invest 1.26 billion dollars in the joint company in the next six years, and the total investments in the planned period will exceed that amount and will reach 1.9 billion US dollars, Politika reports.