OREANDA-NEWS. February 19, 2010. The domestic steel demand recovery may offset its last year fall as early as in 2010. According to the Ukrainian Metal Trader Association, the domestic steel products consumption is to grow 40-50% due to the machine builders’ demand. Mr. Fedoseev, the President of the Association, said this fact could bring the steel makers additional revenues to the tune of USD 1bn. The news coming from the machine builders supports this forecast. In particular, Azovmash Concern (, ) is increasing its monthly steel purchases by seven times. Another famous Ukrainian machine producer, Novokramatorsk Machine Building Plant, plans to increase purchases 1.5 times.

Millennium Capital sees this news as positive, because we estimate the domestic steel demand growth as one of the indicators of Ukrainian economy picking up. On the other hand, this fact gives Ukrainian steel makers additional guarantees in the case of a deterioration of the foreign markets’ situation. Hence, we would like to point out, yet again, that vertically integrated companies will have a competitive advantage, because they do not depend on suppliers and are able to beat the Russian steel producers’ prices having access to their own raw materials.