Forecast-2014 of Scrap, Rebar and Flat Products’ Markets
On September 25, the conference "Forecast-2014. Ferrous and Non-ferrous Metals Market" took place in Moscow. A representative of Metal Expert Consulting has presented a report “Forecast of Scrap, Rebar and Flat Products’ Markets”.
The main trends in Russian market of ferrous steel scrap have been analyzed in the report. Besides, the changes expected in Russian ferrous scrap market in a short term have been described.
Multiple factors in the market are the reason for using optimization modeling in forecasts to make estimates the least subjective.
We expect that:
- Demand for ferrous steel scrap will be permanently growing in Russia because of increasing output of electric steel;
- Decreasing scrap collection will toughen competition between domestic consumers and exporters;
- As a result of Russia’s joining the WTO, scrap export duty has dropped to 12.5% and will keep decreasing to reach 5% by August 2016. As a consequence, steelmakers in European part of Russia will have to agree to high scrap prices to prevent the material from being exported.
Based on Metal Expert Consulting’s quarterly price forecasts for raw material markets, we can conclude that both global and Russian markets of ferrous metals have entered a price recession phase that will determine development of Russian metallurgy.
In Metal Expert Consulting’s opinion, main investments in the industry should be made into:
- reducing costs (the potential is far from being exhausted here)
- developing manufacturing of products with high added value, focusing on sales to the growing Russian and the CIS markets and substituting foreign metal consuming products.
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