The international credit ratings agency Moody’s has said that steel demand growth in Russia will slow down to one to two percent next year, from the four to five percent expected for 2019.
Over the first seven months this year, steel consumption in Russia surged by 10 percent owing to construction sector growth, improvement in the machinery industry, and higher demand for pipes due to infrastructure development and stable demand from the oil and gas sector. During the same period, Russian steel exports declined by 9.5 percent year on year to 24.8 million mt. Some slowdown of the booming steel demand in the second half of the year will lead to annual growth of four to five percent for the whole of 2019, Moody’s said.
However, the Russian steel industry outlook for 2020 is stable as local demand will be firm, steelmakers’ competitiveness in the export market will be strong, and imports will be limited. "While price premiums on domestic steel will likely contract in 2020, the impact on Russian steelmakers' earnings will be cushioned by the rouble’s weakness, vertical integration in key raw materials, and ongoing operational enhancements," said Denis Perevezentsev, vice president-senior credit officer at Moody’s.
