Panelists: Peter Plischke - Commercial Director of "Steel case" Vitaly Popov - commercial director of the Yekaterinburg Steel Company " Julia Rasputin - Director of Sales and Marketing "Ural Industrial Company" Alex Sorvachev - CEO of "Tobol" Alexander Sudnitsyn - Director of Marketing Department of "EvrazMetall-Ural" Discuss: • Why predict price changes in the market is virtually impossible? • Who controls the Urals steel market? • Why metal traders are interested in consolidation? • When the local market will come Chinese steelworkers? Call the exact amount of the local steel market experts find it difficult. They say only that, according to the most conservative estimates, the Urals is the third largest after Moscow and St. Petersburg in terms of sales. Total volume of shipments leaders Highscore "DK" in this year amounted to 130,390 tons According to Alexei SORVACHEVA, the CEO of "Tobol", in 2005, Russia's market has increased by at least 1 million tons, Mr. Sorvachev suggested that such growth will continue this year. Positive dynamics is dictated by the growing demand from construction companies and engineering companies. Such organizations, experts note - the key customers for the traders. The market is unstable and dependent on world prices for metal Predict changes in market conditions is virtually impossible, experts say. The price level in the regional markets is directly correlated with world prices. Rules of the game dictates the manufacturer. In periods of rising world prices mills are increasing the volume of exported goods, thus creating shortages in the local market. ALEXANDER SUDNITSYN, Director of Marketing "EvrazMetall-Ural": "For example, this year's summer of export prices suddenly all went up. Manufacturer sent a large portion of production to foreign markets. Prices in the local market jumped by 20-30%. "This development of the situation, no one expected - adds VITALI POPOV, commercial director of the Yekaterinburg Steel Company. - To predict the stabilization of prices of goods or a small decline. But everything turned out differently. At various enterprises export took up 50 to 80% of all sales. These changes have a direct impact on the profitability. JULIA Rasputin, director of sales and marketing "Ural Industrial Company": "By the beginning of this year, profitability has fallen to 3-5%. She is now an average of 25-30%. By winter it will decrease to 10-15%. The profitability of independent traders reduce supply companies, created by producers of metal, such as "EvrazMetall-Ural" (a structural unit EvrazHolding ") or" Tiros-Metris "(included in the group ChTPZ). They have the opportunity to purchase products of their plants at reduced prices. Often, the manufacturer shall provide to such structures grace, on which other players can not expect the market. Alexander Sudnitsyn identified several reasons for which the manufacturer can come into the market yet, and as a trader: "First - strengthening the business. Its own trading network, regardless of the level of prices will not go anywhere from the manufacturer and will ensure his orders. The second reason - "reconnaissance" of the market. Created its sales network, the producer begins to "stew in this mess." He is able to assess the level of competition and understand the needs of clients. The third motive - profit. If the manufacturer starts to learn the ropes on the market, he gets extra money, selling products not through dealers and through its sales network. Another factor that determines the profitability, - the seasonality of business. By the winter sales of Metal has traditionally reduced by 15-20%. The main consumers in the market - construction companies and engineering companies - in this period, reducing the rate of production. Ten leaders control 80% of the market In the market of Yekaterinburg and the Sverdlovsk region has about 30 companies. Alex Sorvachev in terms of sales share of local players into three main categories: small (sales up to 1 thousand tons per month), medium (from 1 to 5 tons) and large (over 5 tons). Experts say that in the Urals, eight to ten large enterprises, such as "Steel Industrial Company", "Atompromkompleks", "Tobol", "EvrazMetall-Ural and Ekaterinburg Steel Company, controlled, according to various estimates, from 70 to 80% market. Among the leaders are, and independent players at the regional level ( "Tobol"), existing on the market a long time and had time to establish stable contacts with manufacturers, and structures that make up the largest metal trading companies at the federal level (Ekaterinburg Steel Company "), and organizations created directly to producers ( "EvrazMetall-Urals). The main advantages of leaders to enable them to keep the market - solid volumes of purchases and strong contractual relationship with the manufacturer. The last factor that convinced the experts - the key to competition. Vitaly Popov: "Combine interested to work with those who can not guarantee them a stable volume of purchases. They can not stop production. Therefore, and prefer to sign contracts with those who are willing to buy the metal even in winter, when demand for it at the end user is greatly reduced. Winter we have a warehouse packed. The mills slightly reduced prices, but to sell all products in this period, we can not. It accumulates in stock at least three months. But in March, we have almost everything and in sufficient quantities. Those who can not guarantee combines a stable volume of purchases, have to look for alternative ways to fill the warehouses metal products, says Mr. Popov: "The man who wakes up in March, range from the manufacturer no longer receive. And what they do? Buy metal traders tier or take that, perhaps, will combine ". Number of players, said Alexander Sudnitsyn, in periods of rising prices for metal increases at the expense of small traders (with the volume of purchases to 1 ton per month). Most of them leave the market when prices begin to decline again. Market introduction of the city and the area of new regional organizations, which could become serious contenders for the leadership, according to Vitaly Popov, is not expected. In a competitive environment will survive only players from the federal scale and affiliated with the manufacturers of the structure, he believes.