Boston, MA -- (ReleaseWire) -- 07/22/2014 -- The Russian metals sector will face headwinds over coming quarters as European and US demand remain s weak and global oversupply w eighs on metal prices. We expect production of key metals to remain modest , with company investment plans focusing on improving plant efficiency and reducing costs rather than building new plants or expanding production capacity. Despite weak growth, Russia will remain one of the world's largest producers of base and industrial metals including nickel, steel and aluminium.
Steel, Aluminium & Nickel Supply Glut To Hinder Growth
We expect sluggish steel production growth in Russia as the country's largest steel-makers experience squeezed margins resulting in production cuts. The global steel market will remain mired in significant overcapacity, sluggish demand and weak margins for the foreseeable future due to Asian steel surpluses flooding the global market.
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Global aluminium oversupply will continue to precipitate weak aluminium prices. We expect prices to head modestly higher over our forecast period to 2018, but fail to return to their 2011 peaks. Aluminium prices averaged USD2,421/tonne in 2011, while we forecast prices to average USD2,000/tonne over the period 2014-2018. Russia's largest aluminium producer, Rusal, has demonstrated weak performance over the past financial year as a result of low prices.
We expect weak growth in Russian nickel production of just 1.0% y-o-y from 2014 to 2018, reaching 292.0kt in 2018. Global nickel inventories continue to rise, compounding what is an already oversupplied market. LME stockpiles reached 256kt in Q413, with no reversal of this trend in sight.
Oligopolies To Remain In Place
Russia's metals output is highly consolidated within each metal segment, as restrictive foreign ownership rights and established oligopolies prevent foreign competition. Within nickel production, Norilsk Nickel is the...
The Russia Metals Report has been researched at source, and features latest-available data for steel, aluminium and other major globally-traded commodities. Our analysis covers all primary indicators, including production, exports and price, with our forecasts underpinned by Business Monitor International (BMI)'s macroeconomists global economic outlook. The report analyses trends and prospects and critically evaluates latest industry news, trends and regulatory developments in Russia.
BMI's Russia Metals Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the metals industry in Russia.
- Benchmark BMI's independent metals industry forecasts for Russia to test other views - a key input for successful budgeting and strategic business planning in the Russia metals market.
- Target business opportunities and risks in Russia through our reviews of latest industry trends, regulatory changes and major projects and investments.
- Exploit the latest competitive intelligence and company profiles on your competitors and peers.
Summary of BMI's key forecasts and industry analysis, covering metals production and prices, plus analysis of landmark company developments and key changes in the regulatory environment.
SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of the state's metals sector, business environment, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.
Global Metals Market Overview
Global demand, supply and price forecasts for steel and aluminium, as well as gold, copper and tin, drawing on both our industry expertise and our macroeconomic and financial market team's long-term global demand forecasts and shorter-term market views.
Historic data series and forecasts to end-2017 for all key industry indicators (see list below) supported by explicit assumptions, plus analysis of key downside risks to the main forecast.
Production (`000 tonnes, US$bn), consumption (`000 tonnes, US$bn), exports (`000 tonnes, US$bn); prices (US$/tonne), and growth (%).
BMI forecasts to end-2017 for headline country macroeconomic indicators, including real GDP growth (%), GDP per capita (US$), population (mn), industrial production index (% y-o-y average) and unemployment (% of labour force).
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