CIS Metallurgical Raw Materials Markets 2013
On October 2- 4, the conference "CIS Metallurgical Raw Materials Markets 2013" took place in Alushta. At this conference, the representatives of Metal Expert Consulting have not only presented a report “Plans of Steelmaking and Rolling Capacities’ Development in the CIS States”, but also have conducted a seminar “Modeling and Forecasting of Raw Material Markets. Construction of Scrap Market Balances by Example of Russia”.
The presented report has answered the following questions:
- Where do the CIS steelmakers invest today?
- Where should they invest in future?
In past few years, investments into the industry were often made without consideration of current and expected market situation, actual market deficiency, and availability of raw materials (for instance, it is clearly seen in the segment of long products). As a consequence, some projects of doubtful economic efficiency are being implemented in Russia. As a result, not all of the announced projects will be launched.
Despite excessive metallurgical facilities in the CIS and in Ukraine in particular, the industry still offers many opportunities for investments!
During the seminar, representatives of Metal Expert Consulting have told about quarterly price forecasts (methods, results achieved) in detail.
Besides, the participants of the seminar have been presented a method of market balances modeling. Russian scrap market has been used as an example. This market is influenced by many factors that are hard to estimate objectively. As a result, there are problems with estimating current market situation and, moreover, with forecasting.
The market of ferrous steel scrap sees significant changes that we have to be ready to face:
Market balance: demand will exceed supply;
Increasing efficiency: there is still a potential for better scrap processing, the market participants can cut expenses on scrap processing and transportation to consumers;
Pricing: current dependence of domestic prices on global ones gives Russian players a chance to get extra profits by optimizing sales and considering specific features of consuming companies (their sensibility to scrap price fluctuations);
Diversification of purchases: steelmakers will be increasing purchases of scrap substitutes.
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