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[Respublica] - STEEL IS HARDENED THIS WAY

Demand and price decreasing against a background of colossal crisis of overproduction, had turned upside down the metallurgical market. Just yesterday being vain, now depressed holdings are bagging bank credits for refinancing of debts that are irrevocable at the same time preparing for bankruptcy.  There is the only one theory: who does not «give up» – is right. The Byelorussian metallurgists also felt all charm of global sufferings. Buttillnowtheybehavesuccessfully. Though, ByelorussianSteelWorkslastyearshowedlosses. But in 2014 it aligned its position. General Director of BMZ Anatoliy Savenok told about the methods of survival in the market in extreme conditions on the threshold of Metallurgist day.

- Russian experts forecast the end of global branch-wise crisis not earlier than in 2018. Can it really be true that steel products will not be claimed during several years more?

- Basing on expert evaluation there are excess capacities for steel melting for production of 450-500 million tons, 300 million tons is produced in China, 50-70 million tons – in Europe. These excesses are pressed the market. As a stagnation of consuming. That is why till the 70 % of metallurgical companies are working with negative indexes. The average charging of production capacities is 78 %, but for profitability of production it is necessary as a minimum 85 %. In the nearest months a market will endure a season breakdown: a season of rains began in Asia, in Muslim countries in June began Ramadan, in Europe and USA will start mass vacations period, that is why  a business activity in many regions dies away. May be, rolled products prices will be decreased a little bit. In better case – will remain stable. It is logic to expect the market reanimation al the end of summer, when signing of contracts begins for autumn supplies

In general, in the nearest 2-3 years a “cleaning” of metallurgical assets will be continuing. Weak factories will be closed, only effective productions will remain, they will form the basis on the market al the end of decade. But in long term perspective the fate of metallurgical branch will depend on many factors. Experts predict in the nearest years an increase of world economy on 3-4 %. The demand on metal will increase in the same proportion. Many things will depend on production capacities. First of all, in China, where the half of steel products of the planet is produced. If authorities of CPR are fulfilled their plans reducing investments in their branch, production balance and consumption will become earlier.

- For the present, BMZ endures a global hardships with dignity. Will the enterprise make its positions stronger after crisis?

BMZ is poured over by the wave of crisis. But we forecast it, were prepared and could avoid a considerable falling of sales volumes.  Demand for our products will be kept rather high and prices will not fall down lower that first cost, because our economic efficiency is on stable, positive level. Now rolled products for construction, steel cord, structural rolled products for automobile industry are the most needed products on the market. The acceptable level of demand is kept as for steel cord and pipe products.  In short, the traditional BMZ nomenclature is called-for. But, it has not a high marginality. May be only some steel grades have a good profitability. Apropos, the general market tendency is a transition from simple steels to special ones with improved properties. It is linked with continuous increasing of consumer demands to structural materials properties: wear resistance, plasticity, strength. A demand for high quality products will increase in the near future and gradually it will force out the ordinary items. That is why it is necessary to improve continuously, to modernize, to master new type of products to survive. Innovation products unit weight in general amount of BMZ production is 16,5 %.  But a metallurgical branch traditionally differs by restrictions in development and renewal of products range.

This year we exported products for 55 countries. The main regions are Europe and Russia: a share of these supplies is 75,8 % of our foreign supplies. We found a new product markets: Greece, Tajikistan, Armenia, Moldova. Were renewed supplies to Denmark, Italy, Netherlands, Slovakia, Czech Republic,  Belgium, Sweden and other countries.

Vladimir VOLCHKOV

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