Bloomberg quoted Fitch Ratings Ltd. Said Russian steel consumption may fall in 2012 as world economic growth slows while the longer term outlook remains “strong.”

Mr Alexei Fadyushin and Mr Peter Archbold Fitch analysts said after performing strongly in the first nine months of 2011 next year will be challenging because of the adverse shift in global economic conditions.

Mr Fadyushin said “We already saw a 2% decline in the second half of this year compared with the first half.”

Fitch also has concerns about a possible drop in demand for budget cars after government stimulus programs end, while Russia agreement to bring Ukraine into a regional customs union in 2012 will remove duties on imports of its steel pipes.

Mr Fadyushin said in the longer term, the Russian market will be strong. Fitch said in the first nine months of 2011, passenger car output rose 54% to 1.27 million vehicles and steel pipes gained 18% to 7.7 million tonnes.

According to the ratings company Residential construction expanded 3% to about 33.8 million square meters from a trough in January following three years of stagnation.

The analysts wrote in the report that “Demand for steel pipes is likely to be quite strong due to Russia intention to geographically diversify oil and gas exports and the need for renovation of existing trunk pipeline systems.”

Fitch said demand for residential housing is backed by an increase in real disposable income for households of more than 50% in the past five years and the development of mortgage lending, leaving good potential for further growth.

(Sourced from Bloomberg)