Russian Ruble Re-Crashes As Crude Carnage Continues, Indian Steel Mills Threatened

Tyler Durden's picture

The Russian Ruble is re-crashing again today (higher by 3 handles and back above 66 RUB to the USD) as crude oil continues to plumb new depths. Having found some strength - via intervention amid 'stability' in crude prices in late December - the selloff since Christmas has been dramatic in both the Ruble and Crude. However, the contagious impact of this massive Ruble devaluation is, as Bloomberg reports, making life tougher for India's steelmakers. "In the past month or so, deals have been struck for steel imports from Russia," notes one steel industry executive, adding that such purchases "will only increase," as lower Russian prices "will be a threat to Indian steel mills."

 

Ruble re-crashes as crude carnage continues

 

As Bloomberg reports, the rout in Russia’s ruble is making life tougher for Indian steelmakers...

Some local buyers are turning to Russian alloy instead after the past year’s 49 percent plunge in the ruble -- the world’s steepest -- made the nation’s exports cheaper.

 

“In the past month or so, deals have been struck for steel imports from Russia,” said JSW Steel’s Mumbai-based Senior Vice President Sharad Mahendra, referring to users and traders of the alloy. Such purchases “will only increase,” he said.

 

India’s overseas markets such as the Middle East also may turn to more Russian steel, adding to existing competition from Chinese shipments.

 

...

 

Russian companies can offer discounts on the Indian hot rolled steel price, which is $550-$600 a ton, said Mumbai-based Niraj Shah, founder of steelanalyst.com, who specializes in Russia and India.

 

“Apart from shipping steel to India, Russia will also look to sell to markets where India exports,” Shah said, adding sanctions are discouraging demand in parts of Europe. The first Russian steel may arrive in India next month, he said.

And this is a problem as expectations for India's steel industry are high...

Indian steelmakers raised output targets for the year ending March 31, 2015. Modi made higher investment and better infrastructure key priorities after sweeping to office in May. His government plans to make India a global manufacturing hub.

 

...

 

Domestic steel producers may have to “lower prices if they want to sell more,” according to New Delhi-based A.S. Firoz, chief economist at the Steel Ministry’s economic research unit.

 

...

 

“This will be a threat to Indian steel mills,” he said.

 

India’s total imports of the alloy exceeded 6.5 million metric tons in the nine months through December. That’s 1 million tons more than the year ended March 31, 2014, official data show.

 

The nation may become a net importer of 3 million tons after being a net exporter last year

*  *  *
It's a non-linear world after all...
 

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Drummond's picture

Pack your bags sweetheart, we're moving to Moscow.

db51's picture

Pack your bags?   I just handed mine the keys to the car and house and asked her to drive me to the airport.   Long Russian Girlfriends!

PrayingMantis's picture

 

 

... this is how 'Pack Your Bags' went ...

 

... Vladimir rushes into his house and yells to his wife, "Lyudmila, I've just won the lottery! Pack up your bags!"  "Fantastic," replies Lyudmila. "Shall I pack for warm weather or cold weather?" "I don't care," says Vladimir. "Just as long as you're out of the house by noon." ...   :)

no more banksters's picture

No need. Moscow will come to us.

no more banksters's picture

Calm down everyone. When I say "us" I don't mean the US and I don't mean military.

Publicus's picture

If you want to spam at least spam some quality stuff...

Bay of Pigs's picture

Moar good news...

Bullish!

Callz d Ballz's picture

Do I hear rates to 35%?

KnuckleDragger-X's picture

As long as the dollar goes up the ruble will go down,it's the nature of the beast but don't expect Russia to fall apart any time soon.

SteveNYC's picture

You are quite right, the math behind it all is actually simple:

Oil @ $100USD with USD/RUB @ 30 =3,000 RUB

Oil @ $45USD with USD/RUB @ 66 = 2,970 RUB

Alea Iactaest's picture

So how do you factor in Corn down 5%... on the day!

divingengineer's picture

I'm short GMO, diabetes inducing, poison.  Cause seriously, they use it to fatten pigs.  

Kaiser Sousa's picture

"The new Universal Credit Rating Group (UCRG) is being set up to rival the existing agencies Moody's, S&P and Fitch, and its first rating will be issued this year.

The setting up of UCRG is in its final stages, ready to challenge the ‘Big Three’ that currently dominate the industry, the Managing Director of RusRating Aleksandr Ovchinnikov told Sputnik News Agency on Tuesday.

"In our opinion, the first ratings [will] appear … during the current year," Ovchinnikov said, adding that accreditation with the local regulator is already underway.

The news comes on the heels of Fitch’s decision to follow S&P in downgrading Russia’s sovereign credit rating to BBB-, a step above junk level and on par with India and Turkey.

READ MORE: Fitch downgrades Russia’s credit rating to 1 notch above junk level

The new agency will be based in Hong Kong, and provide a check on the ‘Big Three’, which some analysts say don’t provide an accurate reading of economic situations.

Many securities and bonds in the US that had triple-A ratings in 2008 and were considered ‘safe’, turned out to be a bubble, revealed by the subprime mortgage crisis.

READ MORE: China, Russia and the US set up a rival to big three ratings firms

"When the issue of creating an agency alternative to the ‘Big Three’ [Standard & Poor's, Moody's, and Fitch Group] was raised, we in fact offered [a] project that was ready to be launched and was supported by the governments of Russia and China," Ovchinnikov said.

Developed economies are often given a free credit rating pass, whereas developing economies are assigned more risky ratings, the RusRating analyst said."

http://rt.com/business/222175-russia-china-rating-agency/

ukspreads's picture

There's got to be a generation of 20 something traders out there today thinking WTF IS THIS SHIT 

stocktivity's picture

I wonder how many of these young financial advisors have even seen a 15 - 20% correction.  Yet, they are putting other peoples money to "work".  Hey Tylers - too bad you can't find a way to charge admission once this blows up.

thursday0451's picture

25 year old BI analyst here...

The story on the frontpages (originally mistyped as frontlines haha) hasn't made sense to me since a certain cold September morning.

Fortunately I've read enough stuff on ZH and elsewhere to know that the whole system is a joke and ready to implode any minute now. 

Been waiting since 08! Sooner it crashes, the more likely more people survive. 

pendragon's picture

any one got some 1000 ruble notes...i gotta take a forrest and i'm out of bog roll?

Government needs you to pay taxes's picture

Might this sort of economic change push India a little further from the Sino-Russian axis?

El Vaquero's picture

*shrugs*

Who knows?  It's worth considering. 

Id fight Gandhi's picture

People should be panicking about this.

czarangelus's picture

So... Russia's domestic economy remains unchanged, it's just imports are a lot more expensive. Why would this not be filling Putin with glee? I can't imagine a better mechanism for scaring Russian oligarchs into repatriating their cash; incentivizing the construction of a domestic manufacturing base; or harassing the very same Eurofag countries who blindly followed the Pied Pipers of Langley into shooting themselves in the feet.

JustObserving's picture
Indian Steel Mills Threatened

Who gives a fuck about Indian steel mills when Chinese steel mills produce 10 times more?  Besides, when elephants fight, the grass gets trampled.

Obama's war against Putin is having lots of unintended consequences.  The French $20 billion deal to sell Rafale fighters to India is about to be cancelled.  Not to mention, huge disruptions in US shale oil production.

Stumpy4516's picture

Why was India buying ($20 billion) fighter jets from France.  India is susposed to be aligned with Russia and France is clearly directed by the US on military issues.   France has been inolved in the ME on behalf of the US/Masood (although France does refuse some assignments).

And did India not learn what France did to Argentina in it's fight with England?  Only countries ready to be dependent and compliant with the US/Masood should buy military items from countries like France.

Or is India not as aligned with Russia as we are lead to believe.

TheSecondLaw's picture

There's all that politics bullshit, and then there's the business of selling weapons.

forputin's picture

WHy are they doing it to my leader? WHY? WHY?!!! I hate you america, I hate you!!!

noben's picture
noben (not verified) freedom123 Jan 13, 2015 5:08 PM

The Fifth Column in the CRB is doing its job: gradually and systematically weaken Russia and its leader(s).

Even though China has Putin on a short leash (for own selfish reasons and delusions of successfully exploiting the middle-ground), Putin should NATIONALIZE the CRB and thus kick out the Redshield Column. Then...

Step 2a: Peg the Ruble to Gold and sell Oil+Gas for Gold-Rubles. They'd have to buy these hydrocarbons in Rubles or Gold.

Step 2b: Call in Ukraine's overdue loan, and force it to declare bankruptcy.

Step 3: Turn on "Russia's SWIFT" ("RIFT"?). NOW! Provide use of RIFT to the BRITICS (BRIICS + Turkey).

Step 4: Decouple and drop the USD completely.

Step 5: Expand use of RIFT and BRICS credit.

Do all of this VERY PUBLICLY and with PR & FANFARE, to compensate for Redshield's MSM. The longer they wait, the worse it is for them and the better for the US. Steps 4-5 need to be complete by year end, and Steps 1-3 done by April 1. That way, come Easter Sunday (Apr.2), a New Day will rise for the world.

p.s. I've noticed for some time that the Russian leadership (directly or indirectly) is using ZH as means of "Crowd-sourcing ideas", given that some blog comments and suggestions precede subsequent Russian action and positions.

thursday0451's picture

If we are a sounding board...

Hey Russia, howabout a reality TV show where you explore Base 211?

buzzsaw99's picture

back to 65 again? jesus it'll be worth less than a yen at this rate.

In.Sip.ient's picture

Assuming folks here have heard of TA...

TA = "Technical Analysis" just incase y'all

were thinking that other TA... ;)

 

TA seems to say oil is at its effective bottom right now at $45.

Yes, it might even see $44 or even $41, ... temporarily,

but we seem to be in bottoming territory right now.  Not that

oil will simply boomerang from here.  It might take a few months,

(say this spring ) to see $60.  And its possible the 10 year average

going forward is around $80, but all the hyperbole and doomer porn

has, I think, had its day.  Fun while it lasted. ;)

 

Flying Wombat's picture

This "The Saker" guy publishes interesting perspective.  Here's the first paragraph of one of his latest missives.  Click on the link below if you want to read more and to see the video of well known Russian economist Mikhail Khazin giving his insider's take on Russia.  -- Eric Dubin (Flying Wombat), Managing Editor, The News Doctors

# # # #

Who Is Mr. Putin?

TND Guest Contributor:  ”The Saker” 

There is a lot of nonsense and garbage floating around on the Internet about the personality of Vladimir Putin, mostly written by folks who not only know nothing about him, but who don’t even understand the basics about how the Russian state works.  Today, I want to share with you a video (especially translated for this purpose by the Russian Team) in which the renowned Russian economic Mikhail Khazin shares his view of Putin and of Putin’s current position vis-à-vis the hostile and russophobic West.  I don’t always agree with Khazin, and even in this case I don’t fully agree with some of what he says, but I think that Khazin has really “nailed the bottom line on the head” (how is that for a combo-neologism?).  Seriously, I think that Khazin is fundamentally correct, especially about the West’s refusal to accept Putin as anything else than a very junior partner (and even that was in the past, now they want him dead).  Where I disagree with Khazin is when he implies that Putin wanted or even believed that such an honest partnership was possible.  Medvedev – yes.  But not Putin.  By training and by trade he knew the West, and especially its ruling elites, extremely well and I believe that Putin pretended to play the “partnership game” for as long as possible to buy as much time as possible for his party which I refer to as the “Eurasian sovereignists” (folks like Shoigu or Rogozin), as opposed to the “Atlantic Integrationists” (folks Medvedev or Kudrin).  Anyway, listen to Khazin – who is superbly informed and who knows his stuff – and get a rare insider view of what is really happening behind the Kremlin walls.

http://thenewsdoctors.com/who-is-mr-putin/

PrayingMantis's picture

 

 

... >>> "Putin’s current position vis-à-vis the hostile and russophobic West" ...

 

... in a nutshell, here's one of Putin's views on how he'd deal with "the hostile and russophobic West" ... >>> "China and Russia to launch new credit rating agency in 2015" >>> http://rt.com/business/222175-russia-china-rating-agency/ ...

... "The new Universal Credit Rating Group (UCRG) is being set up to rival the existing agencies Moody's, S&P and Fitch, and its first rating will be issued this year."

Platypus's picture

I don't think Putin and his advisers could have foreseen a world with oil below 40 dollars. I believe they estimated a worst scenario around 60 or 70 dollars. I believe oil will hit 20 and trade on the 25 to 35 band for the next decade. This will take care of the BRICS and all the other "anti American" governments out there such as Venezuela. With energy on such low levels the manufacturing business will start to become viable here in the States again. In the 70s the big boys screwed quite a few countries with a melt up price in oil. This time they will do the same but with a meltdown approach. Add raising interest rates here and apart from Europe and the USA ( and maybe japan) the world is SCREWED !!!!!

TweedleDeeDooDah's picture

New Russian joke...

If you take a thousand Ruble note, squint and stare at it long enough, it begins to look like 10 Euros.

...From Russia.

TheFourthStooge-ing's picture

New Ukie joke...

If you take a thousand Gryvnia note and just look at it for a second (no squint required), the first thing you notice is a brown shit smear across the left side of it.

...From Lviv.

http://dnr-news.com/uploads/posts/2015-01/1420375926_b4ggg5tiaaa9-j.jpg