The Russian market of heating radiators keeps on developing. A proof to it is the analysis of the customs statistics of heating radiators import in the first half year of 2016.

Like Quarter I of 2016, Quarter II of 2016 has shown a trend towards fewer volumes of aluminum and bimetal heating radiators import.
As a result, summing up Quarter I of 2016, we can observe a general decrease in import as compared to the corresponding period of 2015 – about 50%.
This fall was particularly evident in March and May of 2016.
In June 2016 the import volume almost reached the 2015 indicators.

As concerns the import structure of aluminum heating radiators classified by the code 7615 20 0000 of the EAEU FEACN, worth mentioning is the retained dominance of the products coming the Peoples’ Republic of China, whose share in the total aluminum heating radiators import volume never falls below 90%.

Apart from changes in the import volume and the retained dominance of the Chinese production, the Russian market of heating radiators is showing a number of new trends.
Thus, for example, despite the ‘hot’ purchasing season, from April to June 2016, there was a fall in the import volume of aluminum heating radiators classified within the commodity position 7615 20 0000 of the EAEU FEACN
Besides, the background of the general decrease in the import volume within this code made it well noticeable that the import share of the Chinese heating radiators has grown, reaching in June 2016 94%.

Worth pointing out is also the illegitimate, given the new regulation, import of bimetal heating radiators by the code 7615 20 0000 of the EAEU FEACN.
The point is that, according to the decision of the Eurasian Economic Commission Board №164 as of 8-Dec-2015, bimetal heating radiators shall be classified within the commodity position 7616 of the EAEU FEACN.

As a result, the volume of bimetal heating radiators imported by the inappropriate code 7615 is gradually falling, though instances of the ‘outdated classification’ are still to be come across.
In their turn, volume dynamics and structure of bimetal heating radiators imported by the code 7616 of the EAEU FEACN in Quarter II and the first half year of 2016 are showing the following trends:
– a dramatic rise in bimetal heating radiators import volume from April to May 2016, which is most likely connected to stricter customs control and, consequently, to partial ‘overflow’ of bimetal heating radiators from the inappropriate commodity position 7615 into the correct classification group – commodity position 7616;
– a decrease of the Chinese bimetal radiators share in the total volume of import by the code 7616 over the first half year of 2016 (from 96% in February to 83% in June);
– a slight decrease of the average statistical price of 1 kg of a bimetal heating radiator in the second half year of 2016 (from $3.1 in April to $2.8 in June) – by 10%.
On the whole, a number of positive trends on the heating radiators market are clear to be seen – be it a fall in the import volume for one position (aluminum) or a decrease in the Chinese heating radiators share for another.

Alongside with it, negative trends are to be observed as well:
– downpricing of import heating radiators without objective market prerequisites (strengthening of the ruble or lower prices for raw materials);
– importing bimetal heating radiators by codes meant for ferrous metal heating devices.

It calls for special notice, that, given the considerable volumes of aluminum and bimetal heating radiators imported by the code 7615 20 0000 of the EAEU FEACN, which in the money equivalent more than three times exceeds the import volumes of cast iron section and steel panel heating radiators taken together, the APHR proposed to the authorized state agencies to supplement the EAEU FEACN with separate codes (commodity subpositions) meant ‘specially’ for aluminum and bimetal heating radiators.

Over the last ten years considerable development on the heating equipment market was shown by the sector of steel panel radiators. Over this period the volume of the Russian market of steel panel heating radiators consumption in kind increased by 1.5.

Meanwhile, the share of steel panel radiators on the common market of heating radiators and convectors also increased both in kind and in financial terms: from 18% to 23.6% and  from 20.4% to 25.4% respectively.

Thus, manufacture of steel panel heating radiators is presently one of the most topical and promising branches in the heating equipment industry.

Besides, steel panel radiators are a category of devices with inherently high characteristics of safety (impermeability and static strength), energy efficiency (heat transfer), and durability (lifetime).

In this connection, we would like to take a closer look at the major development trends in the steel panel heating radiators segment of the Russian market.

According to the statistical data provided by the largest Russian manufacturer of steel panel heating radiators OAO Research Technological Institute Progress (an APHR member), the total volume of steel panel heating radiators consumption market in the Russia Federation in 2015 amounted to approximately 3 500 000 pcs.

The share of goods from member-states of the Eurasian Economic Union (with production sites in the Russian Federation, the Republic of Belarus, and the Republic of Kazakhstan) accounted for 33,77% (1 182 000 pcs). Whereas the share of the four leading manufacturers of steel panel heating radiators from the European Union (Purmo, Poland; Kermi, Germany; Vogel, Poland; Korado, the Czech Republic) on the home Russian market  in 2015 amounted to 32,85%.

The remaining part of the home Russian market is occupied by other foreign manufacturers of steel panel radiators.

In particular, worth mentioning are Turkish steel panel heating radiators occupying a considerable part of the Russian market (600 000 pcs) – 17%.

At that, last year the Russian consumption market contained steel panel heating radiators from a wide range of European Union countries, such as Poland, Germany, Finland, Hungary, Italy, Slovakia, the Czech Republic, the Netherlands, Belgium, Bulgaria, and Great Britain.

In its turn, the Russian Federation presently has two large enterprises manufacturing steel panel heating radiators:

– OAO Research Technological Institute Progress (Izhevsk, the Udmurt Republic, Prado trademark);

– ООО Euroradiators (Engels, the Saratov region, a joint venture with the German enterprise Bosch, Buderus trademark).

Two enterprises manufacturing steel panel heating radiators are also to be found in other member-states of the Eurasian Economic Union: in the Republic of Belarus (OAO Lidselmash plant in the city Lida, Grodno region,  Lidea trademark) and in the Republic of Kazakhstan (ТОО Santekhprom plant, the city Karaganda, Sole trademark).

It is essential to point out a number of positive aspects among the main observed and expected trends in the development of this segment of the market.

Firstly, the existing Russian manufacturers are planning to considerably increase their current volume of production in the coming years.

The Udmurt Progress plant is planning to double their production volume within two years: while in 2015 their production volume amounted to 432 000 pcs, in 2016 it is planned to manufacture as much as 600 000 steel panel heating radiators, and in 2017 – 900 000.

Besides, the recently launched Bosh Thermotekhnika plant in Engels, the Saratov region, is planned to reach its design capacity of 400 000 steel panel heating radiators per year in 2016.

It is to be counted on that the increase in the steel panel heating radiators production volume will make the price offers of Russian manufacturers more competitive as compared to those of foreign enterprises due to the economy of scale.

Moreover, the current devaluation of the Russian ruble is adding to the competitive advantages of domestic production on the Russian internal market as compared to steel panel heating radiators of foreign manufacture.

Secondly, Russian businessmen and investors are considering establishing new enterprises manufacturing steel panel radiators on the territory of the Russian Federation

Thus, it is a short-term plan to launch an enterprise manufacturing steel panel heating radiators of various connection types and of a wide size range within an investment project on the territory of the Kaliningrad region (Svetliy city). In case the project is carried out successfully, by 2019 the production capacity of the plant will amount to 300 000 steel panel radiators.

So, as soon as in the medium-term perspective (two or three years) Russian manufacturers of steel panel heating radiators will be able to increase their share in this segment of the Russian market more than twice– up to 70%.

Yet, this segment of the Russian radiators market has new challenges and dangers.

In the first place, due to the complicated situation in the construction sector the two coming years are expected to bring a general decrease in heating radiators consumption, including steel panel radiators. In addition, the considered segment can show as much as a 15% decrease in the current year, and in 2017 –20% as compared to the base level of 2015.

This situation, given the increase in domestic production, will lead to a considerably harsher competition on the Russian market of steel panel heating radiators both in prices and quality features.

Secondly, Russian manufacturers can contend with a tough challenge of the increased import of Turkish steel panel heating radiators, including the so-called “contract manufacture” under contracts, concluded between Russian importers and Turkish enterprises.

Reference:          

At present, the Russian market has over 55 trademarks of heating radiators imported from the Republic of Turkey.

Such prerequisites are indeed to be observed now, and it is not to be excluded that they can drive the steel panel radiators segment to the same “diseases” that the Russian market of aluminum and bimetal heating radiators has suffered: radiator mass reduction, customs value understatement, import at dumping prices, invalid characteristics of weight and heat transfer on the package and in the supporting documents, poorer quality of the goods.

The structure and volume of import into the Russian market of heating radiators underwent significant changes in the 1^st quarter of 2016.

Transformation also spread to the major trademarks of heating radiators presented on the Russian consumption market.

It is highly indicative that in the 1^st quarter of 2016 the top-10 rating list of imported aluminum and bimetal heating radiators trademarks was entered by five new most popular brands. Continue reading “Top Import Brands of Heating Radiators on the Russian Market” »

Experts of the Association of Heating Radiator Producers conducted an analysis of changes in the volume and structure of the heating radiators import into Russia in Quarter 1 of 2016.

Major trends:

• a decrease of aluminum and bimetal heating radiators import into Russia by more than 50%;
• the Russian Federal Customs Service gets tighter control over customs value  of heating radiators imported into Russia;
• bimetal heating radiators in whose composition steel content exceeds aluminum content entered the Russian market.

Continue reading “Changes in Volume and Structure of Heating Radiators Import into Russia in 1st Quarter of 2016” »

On May 17 the Kremlin hosted a session of the RF Federal Council on developing the construction sector and improving the urban planning.

As Vladimir Putin, President of Russia, noted: “It is obvious that we should establish and legislate standards of construction mandatory to comply with”.

The session results that bear upon the heating equipment market are as follows:

– The State Duma is considering a draft federal law that will allow monitoring construction material prices. In this connection it would be reasonable for heating equipment manufacturers to start paying more attention to optimizing the distribution of their goods.

– Heating equipment and systems will be given special attention while implementing the state policy of enhancing energy efficiency of buildings and constructions.

– Low percent of waste recycling in manufacturing construction material appears to be one of the reasons for high production costs and, consequently, low competitiveness of the industry.