Russian and world steel markets – results of last week (March 1-8, 2015)
Increase in negative trends in the Russian economy is becoming more evident. Apparently, this year the traditional spring recovery in the construction industry will be much weaker than usually, and in some regions it may not happen at all. Production of cars and other machinery equipment also decreases.
According to the forecast of the Gaidar Institute, the deepest decline in the Russian economy will be in the most favorable season - the second and third quarters. And by results of the current year, the decline in GDP will be about 6.8%. And these pessimistic assessments are founded.
Financial sanctions against Russia, obviously, won’t be mitigated in the foreseeable future. This means that domestic companies will continue to repay foreign loans, having only limited ability to obtain refinancing.
We shouldn’t also expect increase in oil prices. On the contrary, the US investment bank Goldman Sachs issued a forecast of the next decline in it. This, of course, doesn’t mean that the prices will fall for sure: Goldman Sachs is known with fairly extreme predictions and therefore often misses the mark. However, there is no opportunities for significant increase in oil prices above the current level of $60 per barrel yet. The demand for it remains limited due to the relatively low rate of economic growth in China, the European Union and Japan, and the volume of the production is reduced too slow.
