Kommersant: Ukrainian Iron & Steel will be able to increase profits by using the global conjuncture

Written by admin on January 11th, 2010

World Steel Association (WSA) has improved the forecast of world steel consumption in 2009 - the fall of 2008 only 8,6% to 1.103 billion tons, and not 14,1% as previously expected, announced yesterday at the WSA annual conference Beijing. Already in 2010, the association expects growth in steel consumption to 1.205 billion tons, "We forecast a recovery in global demand in 2010. In the near future, emerging economies, particularly China, will play a decisive role in stimulating demand for steel," - said the chairman Economic Committee of the WSA Daniel Novegil. The next year the maximum consumption growth expected North America (17,1%), EU (12,4%) and North Africa (11.4%).

in 2009 was the worst for metallurgists in the past few years, when consumption began to rise. A small decline was in 2008 - by 1,4% to 1.207 billion tons biggest drop this year was in North America (at 35.8%), EU (32.6%) and LPG (30.8%) . But if the developing countries, demand has fallen by 17% in 2010 to grow by 12%. In developed countries, consumption of steel in 2009 declined by 34%, but in 2010 will grow by 15%. "The global recovery is stronger than we predicted in April. Current projections suggest that demand for metals in China will increase by 19% in 2009 and by 5% - in 2010," - said Novegil.

CIS markets will recover much more slowly: in Ukraine in 2010, consumption increased by 9,7%, in Russia - by 8,5%. In addition, next year is expected to grow at the traditional Ukrainian steel markets - the Middle East and North Africa: the 15,1% increase in consumption in Turkey, at 12,3% - in Saudi Arabia and by 10,2% -- in the United Arab Emirates.

next year at the Ukrainian metallurgists have the opportunity to build up exports, I"m sure the vice-president of the Industrial Group (manages the assets of the Industrial Union of Donbass) Alexander Pilipenko. BG Capital analyst Eugene Dubogryz predicts that the key markets for Ukrainian steel products next year will be Turkey, the Middle East, North Africa and the EU. "European markets are open primarily to Metinvest, which owns the rolling facilities in Italy and the UK", - said the expert.

He predicts that the volume of Ukrainian exports of steel products next year will grow by approximately 10%. At the same time, projected to the Ministry, this figure could reach 12%. For comparison: up to nine months of this year, exports of steel products from Ukraine has decreased by 15,3%.

But significant growth in exports of Ukrainian enterprises will not be sure Alexander Pilipenko: "Since July, the Chinese market is closed for us - there has already built a sufficient number of companies providing fully China Steel Products. Largest exporters of steel products in China were MMK im. Illich and Zaporizhstal. Eugene Dubogryz notes that the Ukrainian metallurgists will not be able to build up in the next year"s supplies in the market in India, where an investigation against the Ukrainian metal products. According to Dragon Capital analyst Sergey Gaida unlikely Iron & Steel will be able to shift to other markets of Southeast Asia (Indonesia, Philippines, Taiwan), where in July the Chinese manufacturers at the expense of dumping displace not only Ukrainian, but also local products.

According to the analyst IR Astrum Investment Management Alexei Blinov, growth in exports of steel products will have a positive impact on the economy as a whole. "The first thing to expect a decrease in unemployment - the decline of production in industry has caused a big reduction in staff. This is certainly positively affect the volume of contributions to social funds. You can also expect an increase in revenue from income tax, but it"s hard to predict what will this growth ", - says Blinov. A broker Concorde Capital IK Anastasia Nazarenko was confident that if prices for steel products will remain at current levels, while sales of Steel will increase, their stocks will be increased demand for the stock market.

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