Russian metallurgical companies may report solid profits in 2 half of the year

Russian steel companies should earn solid earnings in the second half of 2015, despite slowing global and domestic demand and weak prices.

Ratings agency Fitch said in its report that Russian steel companies are well positioned to report solid profits in the second half of this year. Even a decline in Russian consumption and low world prices should not significantly affect the income of metallurgical companies. This is due to the vertically integrated production of these companies, a reduction in their production costs, and a willingness to reduce capital expenditures in order to maintain cash flow.

At the same time, the report emphasizes that Russian steel producers are suffering from uncertainty in steel demand and weak prices for their products, which is a consequence of recent trends in the Russian steel market.