World raw material market in 2020 year can bring super-profits to the Russian economy thanks to the prices of oil and metals, I told FBA “economy today” RISI expert, PhD in Economics Mikhail Belyaev.
Shift in the global raw material market
The situation on the global raw material market in 2020 year can bring superprofits to the Russian economy. Saxo Bank analysts came to this conclusion. Mikhail Belyaev is sure, that the main shift in the Russian position in the world market will be provided by oil and metals.
“Indeed, quite active growth of the world economy and the acceleration of the movement of the main locomotives are predicted.: China, India and second-tier countries, which includes Vietnam, Indonesia, Africa and other catching up and developing quite actively states ", - said the expert.
Such prospects suggest that, that Russia will receive high profits primarily from energy resources. It is assumed, that the rise in oil prices, along with a reduction in the supply of energy raw materials, could be the consequences of Russia's decision to reduce hydrocarbon production from the beginning of the year under the OPEC + deal, as well as a slowdown in the growth of shale oil production in the United States of America.
"However, when we talk about China or India, then we mean, first of all, a slowdown in growth rates. But it is also necessary to remember the decrease in the absolute consumption of energy resources.. The demand for these reserves will be maintained in the same volumes and rather in increasing ones. ", - added Mikhail Belyaev.
We turn energy resources into money
The current state of the political environment, says expert, says, that the cost of commodities is rising markedly. Therefore, the preserved increased volumes of raw materials, which can be multiplied by the increased prices, will give Russia income.
Expected, that the price of Brent crude oil could rise to 90 dollars per barrel. Considering, that the Russian budget includes the cost of oil in the amount of 41,2 dollars per barrel, budget revenues will exceed expenses.
“But we need to be ready for, that prices will still be slightly lower than those predicted by the foreign expert community. Quotes can grow from 66-67 dollars per barrel to 75 dollars. This rise in price will be enough for additional financing of national projects, and to create a financial cushion of the country ", - explained Mikhail Belyaev.
Metal income
Besides, the expert focuses, currently the volume of consumption of non-ferrous metals in the world market is growing, and with them prices rise.
“First of all it is copper, cobalt, lithium, palladium and nickel. Compared to other countries, Russia mines a lot of non-ferrous metal. But the extraction of these resources is still quite serious and competitive ", - specified Mikhail Belyaev.
AT 2019 the scarce metal rose in price by more than 60% - to 1900 dollars per troy ounce. The demand for raw materials is increasing due to the, that palladium is used in catalysts for gasoline vehicles for combustion of exhaust gases. At the same time, Russia remains the largest supplier of precious metals in the world., occupying more than 40% share. Also over the past year, the cost of nickel has increased by more than 30%.
According to the forecast of the analytical publication Wallet Investor, by the end 2020 palladium price may exceed 2200 dollars per ounce, after which it will continue to grow rapidly. As expected, by the 2025 year quotes can reach 3700 dollars.
This trend, expert believes, should have a positive effect on the profits of domestic metallurgists and increase not only investments in the industry, but also revenues to the federal budget.
Forecast of 2020 year
The set of the given estimates, believes Mikhail Belyaev, gives reason to believe, that the Russian Federation will increase revenues on the raw material side.
“The profit will definitely not be less than that, which was recorded by analysts in previous years. Likely, you can even expect a noticeable increase. In addition, the global market consumes goods, leading Russia to a large-scale export leader's path are agricultural products, weaponry, various products, transport services and much more. The world conjuncture of global markets gives the Russian Federation a clear forecast and indicates a noticeable increase in foreign trade income ", - summed up the expert.
Alexander Melnik