Sunday, January 18, 2009
Russian steel prices are likely to reach bottom
Sunday, 18 January 2009
According to the data from Troika Dialog, the prices for steel in Russia decreased in January by 10% to 15% comparing to December. HR steel prices fell by 15 % to the level of 2004 and CR steel has cheapened by 5%. Preliminary data from Chermet informational agency confirms this statistics: only Mechel group did not revise its prices in January. The following companies decreased their prices: NLMK, MMK and Severstal. But MMK and Severstal have increased prices for several kinds of long products by 10% to 17%. The most optimistic is Evraz Group which has increased its prices by 10% to 50% averagely. Steel works refuse to comment their pricing policy officially.
Experts’ said that that flat steel prices drop in January is smaller than in December yet substantial. An analyst from Troika Dialog believes that this decline is to be the last for big steelmakers. As an example he gives the prices for Chinese HR steel which is already by 20% more expensive than Russian. Some analysts said that prices growth will start by March which is connected with the beginning of construction season.
An analyst form prospect investment company said that in spring steel prices can drop again: a financial year ends in April and the contracts for the next year will be concluded just then. On the results of the negotiations the prices for the next year will drop by 30% to 40%, and Russian prices can follow them and drop by more 15% to 20%.
Some experts said that the dependence of steel prices on raw materials prices, coking coal in particular, which price is decreasing. Others said that there is no steel and coal production misbalance as in the beginning of 2008 and steel prices have all prerequisite to growth.
Source: Kommersant
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