Profit growth is expected in the metallurgical industry

The situation on the steel market in the spring and summer of this year has improved significantly. The volume of sales has grown and the companies have made good profits. Experts note that this happened due to the fact that the ruble fell in price, supplies to Ukraine decreased, and demand increased in the domestic market.

Due to the depreciation of the ruble, Russian steel products fell in price. This led to an increase in the volume of exports. On the contrary, imports have decreased. And as a result, the demand in the domestic market has grown.

In the long-range segment, orders from Russian Railways decreased. The reason for this was the tariff freeze. Metal Expert reports that this year, rail supplies to Russian Railways have been cut in half. Next year, orders from Russian Railways are expected to increase, as they have received permission for a 10% indexation of tariffs.

Despite the drop in demand for rails, orders for rebar increased. Due to this, the situation in the high-quality segment has practically not changed.

Due to the further depreciation of the ruble, the competitive advantage of Russian steel mills will increase even more.

Thanks to orders from such giants as Gazprom and Transneft, pipe producers are provided with jobs for the next 3-4 years. This is due to the fact that Gazprom has begun construction of the Power of Siberia gas pipeline, and Transneft is accelerating the renovation of pipelines. There is a version that the state supports the metallurgical industry in Russia by increasing government orders.

Experts admit a possible deterioration in profitability due to a reduction in government orders. However, they are inclined to believe that the level of prices for raw materials will remain due to the excess production of coking coal in Asia and Russia.