What to hold on to? Russian market of rolled products: June 6-16

The Russian market of steel products for construction purposes is increasingly approaching the state when "there is no money, but you hold on." First of all, the solvent demand for housing is declining, and distributors are losing not only the opportunity, but also the desire to launch new projects. Forecasts for the consumption of rolled products this year are becoming increasingly pessimistic. So far, the summer weather has generally supported suppliers of steel products, but the trends are unfavorable.

Rebar prices are still relatively stable - at least in Moscow, where construction activity is quite high. But in a number of other regions, a gradual decrease is observed. It is possible that metallurgical companies will eventually have to revise factory prices, which are slightly higher than the spot market level. The reduction in scrap metal prices to the lowest level since the end of 2022 opens up room for maneuver.

At the moment, the rebar market looks relatively balanced, but demand for this product is shrinking both on the primary market and on the spot. Therefore, in a few weeks, metallurgists will probably have to make difficult decisions on further reducing production volumes. There is no other option now. Quotes on external markets are low, the ruble exchange rate remains stable. And a change in the economic situation requires a radical break with the current monetary policy, which is not yet realistic.

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