In 2018, the trade wars between steel producing countries kept steel and raw material prices from falling. Nevertheless, from 2019 through 2023, ACRA expects a decrease in prices for these products. Support will be provided by the growth of supply of raw materials for the ferrous metal industry. Concurrently, the commissioning of new steelmaking facilities in the Asia-Pacific region will continue, which could lead to a decrease in the global facility load.
Steel production in Russia is likely to exceed the 2014 level and reach a record high by 2023 due to an increase in new residential building. The expected foreign policy pressure on Russian currency will lead to a growth in coking coal exports, as well as billet and slab exports. The growth in rolled steel prices in Russias domestic market will halt.
A separate section of the publication is devoted to the issue of a possible tax increase on metallurgical and chemical enterprises of the metallurgical sector suggested in the letter from Andrey Belousov, Assistant to the President of Russia. After Belousovs letter was published, companies in the metal industry decided to step up their investment programs.
Nevertheless, the experts believe that Belousovs plan is unlikely to lead to a boom in investment in the Russian metal industry. Despite a possible slight increase in the capital costs of individual companies, the industry debt load is expected to remain at a low level.
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