Author: Georgy Lagvilava, Deputy General Director of "GEORG ENGINER" LLC
In recent years, there has been a growing demand in Russia for Larsen sheet piling, which is used and used in the construction industry: industrial and civil construction, hydraulic structures, oil and gas industry, shore protection, cofferdams, retaining walls and foundations.
In the period from 2018 to 2022, Larsen sheet piling was produced and sold in Russia:
The supply and sale of Larsen sheet piling of European production in Russia faced a number of problems in 2023 and is likely to continue to face problems in 2024 and 2025. The main problems include:
- Sanctions: The European Union and the United States have imposed sanctions against Russia in response to the protection of their territories. These sanctions make it difficult for Russian and European companies to import goods from Europe, including Larsen sheet piling.
- Currency devaluation: The value of the ruble has fallen sharply in recent months. This increases the costs of Russian companies to import goods from Europe, including Larsen sheet piling. As of 06/16/2023, since February 2022, inflation has been 13.46% according to official sources of the Russian Government. We are witnessing progressive inflation.
- Increased demand: the demand for Larsen sheet piling in Russia has increased in recent years. This is due to the growth of the construction sector in Russia. The Russian government is investing heavily in infrastructure such as highways, railways, berths, cofferdams, the Northern Sea Route and bridges.
Problems with the supply and sale of Larsen sheet piling of European production in Russia are likely to persist in 2024 and 2025. Sanctions are unlikely to be lifted in the near future, and the value of the ruble is unlikely to recover significantly. The increased demand for Larsen sheet piling is also likely to continue. This growth is due to a number of factors, including:
- A growing number of infrastructure projects in Russia. The Russian government is investing heavily in infrastructure such as highways, railways, berths, cofferdams, the Northern Sea Route and bridges. This creates a need for Larsen sheet piling, which is a versatile and durable material that can be used for various construction projects.
- The need for more sustainable construction methods. Larsen sheet pile is a more environmentally friendly alternative to concrete and other materials. It is made of recycled steel and can be reused, which reduces waste and pollution.
Taking into account the current situation, EvrazHolding is the only manufacturer and supplier of Larsen sheet piling, Chinese manufacturers of Larsen sheet piling, Larssen brand, are actively advancing to the second place, which you can also purchase or rent from our company GEORG ENGINER LLC. A sharp increase in demand creates a shortage, and any shortage causes a rapid rise in prices.
The absence of direct competitors for EvrazHolding (sheet pile L5-UM), allows to increase the production of Larsen sheet pile and provide the Russian construction industry in full. However, the market economy allows EvrazHolding to increase the cost of Larsen sheet pile per ton, which is what we are seeing today. After February 2022, the cost per ton reached almost 130,000 rubles with VAT. Since there are difficulties in logistics and the lack of direct sales, the cost of a new Larsen sheet pile of European production has reached at least 140,000 r/t with VAT, excluding delivery.
Today, only used Larsen sheet piling of European production is present on the Russian market. Our company can provide information about the availability of used Larsen sheet piling of the brands AU, GU, AZ, VL.
We are observing trends in the growth of demand for Larsen sheet piling in Russia. Forecasts for the development of the construction industry in Russia until 2030:
The Russian government plans to invest a total of 1.8 trillion rubles (US$29 billion) in roads, railways and bridges, as well as the Northern Sea Route (NSR) by 2030. These investments are part of the government's plan to develop the country's infrastructure and accelerate economic growth. Georg I supplies Larsen sheet pile and performs construction work for the construction of a new highway in the Krasnodar Territory Krasnodar – Sochi, highway A-147 Dzhubga – Sochi 171 km long.
Most of the investments, 1.2 trillion rubles (19 billion US dollars), will be directed to improving the country's road network. This includes building new roads, upgrading existing roads and improving road safety. The government also plans to invest 300 billion rubles ($4.8 billion) in railways and 300 billion rubles ($4.8 billion) in bridges.
Investments in the NSR are part of the government's plan for the development of the Arctic region. The NSR is a shipping route that runs along the northern coast of Russia. This is a shorter and more efficient route than the traditional shipping routes that pass through the Suez Canal and the Strait of Malacca. The Government hopes that by investing in the NSR, it will be able to attract more shipping to the Arctic region and stimulate economic growth in the region. Georg I plans to supply Larsen sheet pile to the port of Dixon with more than 2,000 tons by September 2023.
The government's investments in infrastructure are expected to create jobs and accelerate economic growth. According to government estimates, the investments will create 1.5 million jobs and contribute 1.5% to GDP growth.
The Government's investment in infrastructure is an important undertaking. This is a sign of the Government's commitment to developing the country's infrastructure and accelerating economic growth.
Our company GEORG ENGINER LLC provides and performs the entire range of work from design to immersion of the Larsen sheet pile. Delivery of new and used sheet piling L5-UM- GU-VL, calculation of the technical design, immersion and extraction of the sheet piling using our own vibratory loaders, excavation and repurchase of the sheet piling at a price of 60%-80%, rental of sheet piling and vibratory loaders.
Sources:
1. The Ministry of Construction of Russia: https://minstroyrf.gov.ru/
2. Russian Steel Association: https://www.rao.ru/