The authorities will follow steel prices – Business – Kommersant

Against the backdrop of new complaints about rising prices for steel products, the government will not yet resort to limiting domestic steel prices or regulating the profitability of steel companies. Following the meeting with First Deputy Prime Minister Andrey Belousov, it was decided to continue monitoring prices, and an instruction was given to develop a model of price risks for steel producers and consumers. The discussion about the rise in steel prices again gained momentum in March, when the rise in prices for the main metallurgical nomenclature was recorded.

The government will not yet resort to strict measures to regulate steel prices and will limit itself to monitoring them. According to Kommersant’s sources, these are the results of a meeting with First Deputy Prime Minister Andrey Belousov, held on April 5 with the participation of top managers of the largest metallurgical companies and heads of federal departments. In addition, the Ministry of Industry and Trade and the Ministry of Construction were instructed to develop a model of price risks for metal-producing and metal-consuming industries. Andrey Belousov’s representative confirmed to Kommersant the fact of the meeting and instructions to develop a price risk model and monitor prices to be able to respond promptly if necessary.

The meeting was devoted to the reasons for the rise in prices for rolled metal on the Russian market this spring, which was signaled in March by the FAS and the Ministry of Industry and Trade.

According to Kommersant’s interlocutor, metallurgists managed to prove the market nature of the increase in steel prices and the fact that we are talking, in fact, about restoring prices to acceptable levels.

Metallurgical companies have outlined options for stabilizing prices by offering consumers long-term contracts with a fixed price and promising significant discounts in this case.

In March, the Ministry of Industry and Trade reported an increase in prices for rebar, sheet metal, iron ore concentrate and ferrous scrap. “At the moment, we confirm the rise in prices for rebar, but it is associated with a seasonal increase in prices for scrap metal, as well as tariffs for transportation and electricity, so it can be considered justified,” Deputy Minister Viktor Yevtukhov told reporters on March 20. According to him, in order to prevent price spikes, a meeting with metallurgists has already been held, at which it was decided to update the 2022 agreements with metal traders on fixing the margin for the resale of metal products.

The FAS announced in March that it was receiving complaints about rising prices for metal products and intends to analyze the reasons for identifying violations of the antimonopoly law. concurrent service trying to limit the profitability of metallurgical companies, setting this as a condition for concluding a settlement agreement with metallurgists on antitrust cases that have already begun.

Over the past five years, steel prices have risen less than other building materials, says investment strategist at Arikapital Management Company Sergey Suverov.

“Yes, in 2021, after the lifting of lockdowns, steel prices rose more than other materials, but since the second half of 2021, they have been declining. So, from 2018 to 2023, prices for hot-rolled sheet increased by 33%, and for rebar – by only 19%. At the same time, the increase in prices, for example, for fiberboard boards amounted to as much as 156%, building mixtures rose in price by 62%, slate – by 54%, ”the analyst notes.

He also points out that the share of steel costs in construction is very small: for example, a ten percent increase in rebar prices increases the cost of construction per square meter by less than 1%. “This is also confirmed by comparing the dynamics of prices for rebar and per square meter. Since 2020, steel prices have both risen and fallen, while house prices have risen continuously. Thus, it can be argued that there is no relationship between the cost per square meter of real estate and the cost of rolled steel due to the fact that rolled steel makes up only 3-6% of the cost per square meter,” he notes.

Evgeny Zainullin