Playing on the minimum: Russian long steel market, March 17–24

The Russian rebar market has entered a state of stagnation. Both metallurgical companies and distributors would like to raise prices for this product, but there are no objective grounds for doing so. While demand for rebar exists, with some companies even reporting an uptick in the second half of March (albeit from a very low base), the construction sector, broadly speaking, has not shown signs of a spring revival. Another significant challenge for metallurgical companies is the strengthening ruble amid relative stability in global prices for billets and long steel products. Over the past two weeks, as the ruble gained value, exporters managed to secure only minor price increases. Overseas shipments are currently viable only for plants located near ports, and even then, only if raw material costs remain unchanged.

At its meeting on March 21, the Central Bank of Russia kept the key interest rate unchanged. This signals that the economic situation has not shifted and is unlikely to change in the near term. As a result, visible demand for steel products will remain low, with significant improvement unlikely. In this environment, metallurgical companies can avoid a downturn only by continuing restrictive production policies, though no one is currently considering lowering prices.