30-09-08 Prices for metal products in the United States have been falling sharply since the beginning of autumn due to lack of demand in the construction sector and automaking. A similar tendency can be noted on the Russian market, although it is not yet as extreme. So far, only the price of steel reinforcements is falling in Russia, in conjunction with the freezing of construction projects.
The Wall Street Journal predicted that American steel companies may experience lower financial indicators in the second half of the year because of unstable financial markets and a slowdown in commercial construction. Prices for many steel products have fallen 10 %.

ArcelorMittal, the world's largest steel producer has announced plans to cut production by 15 % in some countries this year. Russia is also being affected.
"The problem with crediting is being accompanied by a fall in demand for several type of metal product," said Mechel representative Alexander Tolkach. "For example, prices on steel stock have fallen to $ 600-700 per ton lately," that is, by 30-40 %. Steel reinforcement has fallen by even more than 10 % in Russia. Other segments of the market, pipe making and automaking, for example, do not show signs of waning yet. Automaker GAZ is expecting steel prices to fall, however, confirms group deputy chairman Elena Matveeva.

Analysts say that the falling demand in Russia is only of a seasonal nature. In March next year, the construction season will resume and the demand for steel reinforcement will pick up.
Financial problems in the US may have a negative impact on Severstal, however, since 45 % of its assets are located in that region.