When, if not now? Russian long products market: April 25 - May 12

The Russian long products market spent the holiday break on the whole quite well. Visible demand on working days was at a high level, as many consumers purchased metal in stock. Weather deterioration was a bit of a problem in some regions, but it should soon return to normal. Prospects for the second half of this month are assessed differently by market participants, but the approaching summer gives hope for further expansion of consumption volumes.

Nevertheless, there are also many risks for the near future. According to Rosstat data, the volume of construction work and individual housing construction indicators exceeded last year's results in the first quarter. But there are fears that in the future this growth may be replaced by a decline due to a decrease in the number of new projects. If monetary policy remains unchanged, the apparent demand for rolled products for construction purposes this summer may be lower than expected.

Another problem could be oversupply. The ruble has long been predicted to weaken, but it continues to strengthen gradually. With extremely low dollar prices on the external market, export operations are frankly unattractive. We can hope for a slight improvement in the coming days, but significant growth looks unlikely. This may become one of the factors contributing to the increase of rebar supplies to the domestic market.

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