Prices for steel semi -finished products have decreased to two -year minimums
Over the past week, the cost of steel semi -finished products (slabs and a hot rolon) fell to many months of minimums. Market participants expect to continue to reduce prices for steel products of all redistributions and in the second quarter and do not see the prospects for the rapid restoration of demand, especially taking into account the preservation of the key rate of the key rate at the current level. Small support to steelines can be provided by subsidies for the transportation of steel goods in the western and southern directions and activation of consumers in connection with the start of the construction season. But market participants expect to accelerate the decline in metal consumption in Russia compared to previous forecasts.
According to RASMET, for a week ending on March 23, the cost of steel semi -finished products (slabs and hot rolled rental) fell to many months of minimums. So, by the end of last week, the cost of a ton of steel workpiece dropped to 37.7 thousand rubles. On FOB terms, the Black Sea, which has become a minimum since the end of January 2023. The price of a hot rolon by the end of the second decade of March amounted to 40.5 thousand rubles. For a ton, the last time the prices were at a comparable level at the end of December 2022. A decrease in the cost of steel semi -finished products is observed throughout March, it is evident from the data of Rusmet RASM: the slabs fell into 1.9%, a hot rolled roll by 3.7%.
Refined market participants expect to continue reducing prices for steel products – both low and high redistribution – and in the second quarter. Participants in the market almost do not see prospects for restoring the demand for products in the short term (see Kommersant on February 25). “The softening of credit-money policy and the active implementation of infrastructure projects can increase demand,” says Severstal. Perhaps subsidies for the transportation of steel cargo in the western and southern directions can provide insignificant support to industry companies, but they are unlikely to be able to radically change the situation, adds Ilya Makarov, director of the corporate ratings of ARRA. However, the main export markets for Russian steelways, regardless of the port of the departure, remain China, India and the Asia Minor. And the competition in these markets is now extremely aggravated due to the start of American trade duties on Chinese steel, a slowdown in the rate of construction in China itself and, as a result, a sharply increased volume of Chinese steel in the regional markets (see Kommersant on February 17 and March 25).
A minor restoration of demand for steel in the second quarter is expected in Acorus in connection with the start of the construction season. However, the prices of the reinforcement necessary for the construction, it seems, have already “played” this trend, the interlocutors of Kommersant in the market are afraid. So, according to Rusmet, by March 23, the cost of a ton of reinforcement decreased to 41.7 thousand rubles. per ton, Poshevsv since the beginning of March by 3.1%. In February, the metal traders actively purchased the reinforcement, preparing for the beginning of the season, which pushed the cost of the products up, but this trend did not become long -term (see Kommersant on February 12 and 27).
According to the World Association of Steel (WSA), in February, almost all the largest countries, manufacturers, became reduced. In Russia, smelting decreased by 3.4% of the year, to 5.8 million tons. Production in 69 countries that provide WSA data also decreased in February by 3.4%to 144.7 million tons. For two months, smelting in the Russian Federation decreased by 2.5%, global – by 2.2%.
Analysts of RASMET RA RASMENTS expect a decrease in the consumption of metal rolling in the domestic market in the first quarter at 15%. The earlier forecasts for the full 2025 are more optimistic: Russian steel at the end of January predicted a reduction in demand for steel in the Russian Federation by 5%, “BCS world of investment” – a decline in domestic consumption by 2-3%. But Rusmet analysts show that the second quarter will not bring improvement. “Since the key rate did not decrease in March, counting on the restoration of the construction industry, and therefore metal consumption, is not worth it in the second quarter,” they write. “Hope is now on the third quarter and search for new export opportunities.” The latter may well stimulate state subsidies for loading industrial goods in a western direction, experts admit. But in reality, the average speed of the cargo by rail falls.
“Despite the complex situation, the main demand for metallurgists continues to present housing construction, mechanical engineering, energy,” says Dmitry Orekhov, the managing director of the rating agency of the NCC. “At the same time, the softening of monetary policy, the development of individual housing construction, infrastructure projects can support metallurgists, as well as export Deliveries « . But only in the case of state support, he emphasizes. In MMK, NLMK and Evraz did not respond to the requests of Kommersant.
