Ukrainian metal producers have faced unexpected fall in steel demand

The Ukrainian metal producers have faced unexpected fall in steel demand. Within the last month, the stored reserves of unsold rolled steel increased by 1/3 to the maximum level for the last 5 years.

Yesterday Ukrpromvneshexpertiza reported that the growth in metal items production in December 2013 on the background of a reduction in demand at the external markets led to rapid growth in stored rolled steel in the ports, by 27% to 2.2 million tons. Such volumes have not been stored since the crisis year of 2009. They increased in the reserves of long items by 130,000 tons and flat sections by 260,000 tons.

The deputy director of the analytic department of Ukrpromvneshexpertiza, P. Perkonos explained that the Ukrainian producers increased steel production awaiting the traditional growth in demand at the verge of December and January. The chief analyst of Dragon Capital, D. Sakva says that the metal producers awaited  a repeat of the situation when prices for metal items increased in Q1. However this time the traders and the consumers are tough in their decision not to bear the risks of a reduction in circulation assets and growth in reserves at the end of the financial year.