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Financial results of slag wool production. Regions show different dynamics

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Financial results of slag wool production. Regions show different dynamics

What do the production dynamics and prices of slag wool and other insulation materials look like

We keep on providing our readers with some insight into the conditions of the construction materials market. Today we shall speak about the producers of slag wool and how they feel on the market.

Production

In 2016, the production of slag (silicate) wool has shown trends characteristic of the whole industry of construction materials’ production. The current figures of production volumes for the first three quarters of 2016 show a decline by 15.5%. the slag wool production volume in January – September of 2016 totaled 13.8m cubic metres, while during the same period of 2015 it equaled 16.3m cubic metres.

Slag wool production in 2015—2016 (thous. m3)

RF regions

3 quart. 2016

3 quart. 2015

%

Central Federal District

6621

7374

-10,2%

Volga Federal District

1134

1176

-3,6%

Siberian Federal District

3740

4566

-18,1%

North-Western Federal District

1454

1856

-21,6%

Ural Federal District

277

1119

-75,2%

Southern Federal District

502

146

+245,0%

Far-Eastern Federal District

46

72

-36,0%

Russia total, thous. m3

13775

16308

-15,5%

Source: CM PRO

A maximal decrease of slag wool production was shown by the Ural Federal District, where the volumes of its production fell to 1.1m m3 in January – September, 2016 when compared with 2.7m m3 during the same period of 2015. 

The smallest production decrease is registered in the Central Federal District, whereby the totals went down from 7.4 to 6.6m m3.

The actual results of the first three quarters of 2016, taking into account the seasonal factor, allow us to speak about the production volumes’ assessment for the whole year, meaning that about 17.7m m3 of slag wool will have been produced in Russia. The production volume leaders are the Central Federal District with  8.5m m3, the Siberian FD with 4.7m m3 and the North-Western FD with 2.1m m3 of slag wool.

The production volume dynamics are also influenced by the seasonal factor, as indicated on the diagram below.

 

Seasonal dynamics of slag wool production volumes (thous. m3)

Financial results of slag wool production. Regions show different dynamics

Source: CM PRO

 

Prices

Information from the Russian Statistics Service (Rosstat) was used for the analysis of the purchase and producers’ prices for mineral heat and sound insulation materials. It was analysed regarding the following groups of goods: 

 

Producers’ prices: rock wool, mineral silicate wool and similar mineral wools and their mixes, in bulk, in sheets and in rolls (roub. for 1 m3)

Source: Rosstat

 

In January – September, 2016, slag wool prices changed divergently, though the seasonal factor is definitely present. During the summer months the average price is lower, then it grows and becomes steady. 

On the whole, the average price in the third quarter of 2016 is lower than the one from the same period of 2015 by 2.8%. Additionally, the price does not even include the accumulated inflation for the period of 2016.

 

Purchase prices: mixes and goods of heat and sound insulation materials, not included in other groups (roub. for 1 m3)

 
Source: Rosstat

 

The purchase prices for heat insulation goods behave evenly and the tendencies of 2016 may be compared to last year’s tendencies though, on the whole, the prices are lower. The average price for heat and sound insulation goods in 2016 has been 1,177 roub./m3 against 1,215 roub./m3 in 2015 (–3.1%).

 

Finance

 

Federal District

1 quart. 2015

1 quart. 2016

Δ

2 quart. 2015

2 quart. 2016

Δ

Russian Federation

12 166

13 645

12,2%

27 279

30 595

12,2%

Central FD

5 047

5 680

12,5%

11 670

13 134

12,5%

North-Western FD

636

531

-16,6%

1 371

1 144

-16,6%

VolgaFD

1 976

1 349

-31,8%

4 415

3 013

-31,8%

Southern FD

89

22

-75,0%

204

122

-75,0%

Ural FD

3 240

4 702

45,1%

6 828

9 910

45,1%

Siberian FD

869

1 014

16,7%

2 093

2 442

16,7%

 

Source: CM PRO

 

The industry’s average total revenue in the second half of 2016, according to CM PRO, will be higher than in the first half-year.  This is due to increased production volumes and the simultaneous growth of prices for the “Mixes and goods from heat and sound insulation materials” category in all the regions except the Ural FD.

 

According to preliminary estimates, however, the revenue will fall in the NWFD, the VFD and in the SFD. Coming back to the production figures one may see that trends regarding monetary indices are justified by the tendencies in the sphere of production. 

 

Slag wool production in the NWFD significantly decreased in the second quarter and the same situation has been observed in the VFD. The estimate for the SFD has been adjusted in relation to the increased production volumes, although the figures are much lower than the production volume in the first quarter.

 

The net financial result of the second quarters both in 2015 and 2016 is positive, though the tendency is not characteristic of all regions. The Southern FD, according to our assessment, demonstrates the negative net profit, while the Central and the Ural FDs may please investors with more or less noticeable growth of the financial indices.

 

When considering the tendencies of 2015 and 2016 on the whole one may see that the net financial result is growing faster all over Russia in 2016. The industry seems to be overcoming the crisis, although external factors could still interfere, of course."

 

Semyon MORON

Analytic materials presented by «CM PRO»

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