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16
Barter is back in Russia as one Chinese company seeks to navigate settlement issues (www.reuters.com)
submitted 4 months ago by Scotty@scribe.disroot.org to c/europe@feddit.org
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cross-posted from: https://scribe.disroot.org/post/4097567

In Russia, barter is back for the first time since the chaos of the 1990s as settlement problems resulting from the conflict in Ukraine have forced at least one Chinese company to seek steel and aluminium alloys in exchange for engines.

In the economic and political chaos which followed the 1991 collapse of the Soviet Union, spiralling inflation and chronic shortages of funds forced enterprises across the land to agree to payment in kind.

Barter, though, sowed even more chaos through the economy as vast chains of contingent deals were set up for everything from electricity and oil to flour, sugar and boots, making pricing even harder to determine, and earning some people fortunes.

More than three years into the Ukraine war, barter is back again in Russia.

At the Kazan Expo business forum on Monday, Chinese companies cited settlement issues and Russian demands that they bring production to Russia as major issues hindering the development of bilateral trade.

"We offer innovative cooperation models aimed at reducing settlement risks," Xu Xinjing from Hainan Longpan Oilfield Technology Co., Ltd told the forum through a translator, adding that "we offer a model of barter trade."

In exchange for the power equipment, his company wants to receive Russian shipbuilding materials.

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[–] tal@lemmy.today 3 points 4 months ago* (last edited 4 months ago)

In Russia, barter is back for the first time since the chaos of the 1990s as settlement problems resulting from the conflict in Ukraine have forced at least one Chinese company to seek steel and aluminium alloys in exchange for engines.

looks blank

I can see China importing ore from Russia, but...China is importing steel? Like, one of the top international trade issues with China over past years has been China exporting enough steel to swamp world markets, where countries are worried about maintaining some level of domestic production, as steel is a strategic good.

kagis

Hmm. This says that Russia "rerouted" steel to China

I assume having to sell below cost

due to sanctions during the war; maybe the Russian steel industry is hoping to outlast the current period of sanctions.

https://agmetalminer.com/2025/07/02/chinese-steel-industry-floods-russia/

Steel Wars: China Floods Russia with Cheap Metal as Sanctions Cripple Kremlin Mills

Ongoing geopolitical conflicts, including one active war, combined with market instability, declining steel demand in certain global regions and a rise in protective tariffs on exporting nations, have all come together to force some steel-producing countries, including China, to reassess and refocus their steel industry supply chains.

Faced with weak domestic steel demand due to a slowdown in economic growth, China’s steel industry has been revising its export roadmap. Its exports of metal alloys to Russia, for example, have grown in value by approximately 16% in the first five months of 2025 compared to a mere 1.3% in 2024. According to this report, the export list mainly includes stainless and specialty steel types not made in Russia. However, in several areas, standard construction-grade steel imports from China have also begun to make inroads.

Media reports seem to suggest that the steel production in Russia is coming down because of the sanctions imposed following its invasion of Ukraine. According to a World Steel report, steel production in Russia decreased by 7% year-over-year to just over 70 million tons in 2024. Across the Russian steel industry, firms have curtailed production between 8% and 14%.

While the impact on Russia is important, this story is more about China. If you were to look at it in a different way, both nations are jostling for space in the global steel business. However, the Kremlin is at a disadvantage because of the sanctions. China, on the other hand, enjoys the benefits of being the world’s largest producer and consumer of steel.

For now, China is making a concerted effort to find new customers, especially since local buyers and former export partners are simply not purchasing steel at the same rate as they were a few years ago. More recently, Beijing has turned to Asian and Southeast Asian markets for dumping its steel until some of them retaliated with tariffs, just like the U.S.

https://tradingeconomics.com/china/imports/russia/iron-steel

Yeah, it looks like the exports were only over the past five years, mostly during the war.

Maybe the Chinese company in question is basically looking to get steel subsidized by the Russian state even more cheaply than it could in China, effectively make a buck off the war when the Russian steel industry lacks export options.