Russia's steel consumption could decline 5%-7% in 2024 amid cooling in construction on interest rates - Severstal CEO

MOSCOW. Oct 29 (Interfax) - Russia's steel consumption could decline 5%-7% in 2024 amid cooling in construction owing to rising interest rates, Severstal CEO Alexander Shevelev told Interfax.

"We see a negative outlook versus the beginning of the year, unfortunately, when we had expected a decline of 1%-2% in metal consumption. However, we understand that the decline in consumption could be 5%-7% at the end of the year following our having seen a downturn of 9% in the third quarter," Shevelev said.

The construction industry has namely slumped, where demand is cooling owing to the high key rate, limited possibility to refinance, and high risks, Shevelev said.

"A number of our clients, above all from small and medium-sized companies, prefer to reduce their business and simply put money in the bank under this rate, as the yield on deposits has either equaled or even exceeds some types of business," he said.

The Russian Steel Association, which represents the interests of Russia's largest metals companies, forecasts a drop of 6% in domestic steel consumption in 2024. Domestic metal consumption continues to decline in Q3, the association said at the end of October.

World Steel Association in its updated October outlook projects that demand for steel in Russia could contract 1% year-on-year to 44.2 million tonnes this year.