Business Monitor International


Russia Metals Report

Published 15 July 2014

  • 64 pages
 
$1,295.00
Russia Metals Report

BMI View: 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.

Weak Growth Outlook
Russia - Crude Steel Production '000 tonnes & % Growth

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...

Table of Contents

BMI Industry View
7
SWOT
9
Metals SWOT
9
Industry Forecast
11
Steel: Global Oversupply To Weigh On Growth
11
High Relative Capacity Utilisation Rates
14
Table: Steel Production & Consumption (Russia 2010-2018)
15
Table: Steel Industry Historical Data (Russia 2005-2012)
15
Aluminium: Weak Growth Outlook
16
Table: Aluminium Production & Consumption (Russia 2010-2018)
20
Nickel: Limited Growth Ahead
20
Table: Refined Nickel Production & Consumption (Russia 2010-2018)
23
Regulatory Development
24
Key Details
24
Political Risk Update
24
Table: Political Overview
26
Commodities Forecast
28
Commodity Strategy
28
Iron Ore: Not Much Respite In Sight
28
Steel: Production Rationalisation Too Slow To Provide Price Upside
30
Aluminium: Further Price Rally Unlikely
31
Lead: Ripe For A H214 Boost
32
Copper: Consensus Moving Our Way
33
Nickel: Price Surge To Abate Further
34
Tin: In A Sweet Spot
35
Zinc: Bullish Short-Term Picture
36
Table: Select Commodities - Performance & BMI Forecasts
38
Commodities Forecast
38
Table: BMI Steel Price Forecast
38
Short-Term Outlook
38
Core View
39
Surplus Set To Slim
40
Production: Reining In Growth
40
Consumption: Deceleration Ahead
42
No Respite From Chinese Exports Over Coming Months
44
Arbitrage Set To Grow Between East And West
44
Risks To Price Outlook
45
Table: Steel Data & Forecasts
46
Table: Global Steel Prices By Region & Product, USD/tonne (average)
46
Competitive Landscape
48
Table: Russia - Largest Listed Metals Producers - Financial Data
49
Company Profile
50
Severstal
50
Table: Severstal - Key Financial Data
53
Norilsk Nickel
53
Company Overview
55
Company Strategy
56
Table: Norilsk Nickel - Key Financial Data
57
RUSAL
59
Latest Results
62
Table: Rusal - Supply Chain Analysis
62
Table: RUSAL - Key Financial Data
63
Methodology
64
Cross Checks
64

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.

Key Benefits

  • 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.

Coverage

Executive Summary

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 Analysis

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.

Industry Forecasts

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 (%).

Macroeconomic Forecasts

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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