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In general, we can see that despite economic slowdown, demand for steel is quite satisfactory. In other words, if overall economy has risen up by less than 1.5% last year, we estimate demand for steel to be more than 3%. The main drivers were construction and oil and gas industries. Among the outsiders we can name machine-building and automotive industries. We are expecting some stabilisation and growth in automotive segment next year and continuous healthy growth tendencies in construction and oil and gas industries.
We think that Russia is in the development phase, where growth rates of demand for steel would be higher than economic growth rates by 1,5 or 2 times. With regards to the 2% growth, we believe that demand for steel would grow by 3 or 3,5%. Concerning the impact of global market, obviously, the main source of impact comes from prices. Prices for steel are set on the global level and are not determined inside Russia. Steel is the most traded product in the world and every third tone of steel is crossing international borders.
So, of course, the main impact coming from outside is pricing trends on steel and raw materials as well. In terms of the actual interaction between Russia and the rest of the world, it is mainly determined by the export; Russia is a large exporter of steel, one of the largest in the world. However, of course, twice smaller than China in volumes, but nevertheless…
And secondly, one of the drivers for demand growth in Russia is presence of foreign companies in automotive industry and slow, but stable localisation of steel sourcing, which they still purchase from abroad. But, Russian manufacturers tend to purchase more and more Russian steel. And we see that this tendency will continue and it will determine the growth of steel market, as we expect.
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