There was no growth in demand from the construction sector, which the market expected, despite some recovery in the individual construction segment. The cost of rebar may decrease by another 5-7%, and recovery in the segment is expected no earlier than 2026-2027 and only if the key rate is lowered.
Illustrative photo: "Taganrog Stroy".
The cost of rebar rolled products by June 8 fell to 36 thousand rubles per ton, which was the lowest since the end of 2022, according to the Rusmet rating agency, which is referenced by the Kommersant newspaper. Prices in the segment continued to fall after a slight positive fluctuation in the first week of June.
The negative situation in the rebar segment persists, despite the emerging positive trends in the steel market. According to the Chermet Corporation, in May, steel production in the country increased by 5.3% month-on-month, to 6 million tons, and slab prices showed positive dynamics at the end of last month for the first time in a long time.
Traders were counting on increased rebar consumption since the beginning of the construction season. However, Dmitry Orekhov, Managing director of the NKR rating agency, notes that demand in the segment remains weak and rebar sales volumes do not reach last year's levels. According to him, this is due to unfavorable trends mainly in the construction of apartment buildings against the background of the high cost of money in the economy.
Manufacture of fittings. Illustrative photo: "EVRAZ Market".
According to forecasts of the NKR, in the coming months metallurgists are likely to be forced to reduce prices by at least 5-7% more due to excess supply over demand.
According to Mr. Orekhov, the situation may change for the better if monetary policy continues to soften, and investments in the construction sector intensify, including from the government in terms of infrastructure.
Boris Krasnozhenov, head of the Securities Market Analytics Department at Alfa Bank, says that the only segment where there is some recovery remains individual housing construction. Also, according to him, Russian long products have export potential, but it is insignificant. "In the export direction, the price of 12 mm rebar remains at about $520 per ton. At this price level, the current ruble exchange rate and scrap metal prices, Russian exporters working on electric arc furnaces can earn about $30-50 per ton," the analyst estimated. But, notes
