Novolipetsk Steel OJSC, Russia’s largest steelmaker by output, expects little or no growth in global demand for the material next year and some producers will probably cut supply amid the rout in prices.
"This situation cannot last in the longer term," Chief Financial Officer Grigory Fedorishin said in an interview on Tuesday in Moscow. With demand declining this year, much of the industry is contending with unprofitable production while next year’s growth in demand may be “slow to zero,” he said, Bloomberg reported.
Steelmakers have been hit by the lowest prices in more than a decade as China, which accounts for about half of global output, floods the market with cheap exports amid a slowdown in its economy. The World Steel Association earlier this month cut its outlook for global demand for this year, predicting usage will contract by 1.7%.
