Alexey Gromov, Principal Director on Energy at the Institute for Energy and Finance, commented to the Oil and Capital magazine about the impact of rising prices for metal and building materials on the implementation of investment projects.
The rapid rise in prices for building materials and metals is forcing companies to seek funds for launched infrastructure projects or to close them.
Alexei Gromov noted that the rise in prices for metal and building materials will undoubtedly lead to an increase in the cost of investment programs of companies, but it is premature to say that it can lead to a reduction in investments: “We see a boom in all commodity markets, and oil and gas companies are also making good returns. Under these conditions, on the one hand, their investment projects will become more expensive, but, on the other hand, the companies will have enough funds to implement projects even at the prices that are prevailing today,” the expert explained.
He pointed out that the situation in the petrochemical industry is always a little more complicated, since it depends not only on the cost of building materials, but also on technologies: “Technological chains are now also becoming more expensive, so some slowdown in the implementation of petrochemical projects is possible. But in terms of mining projects, the companies have enough resources,”Gromov emphasized.
With regard to the shipbuilding industry, the expert confirmed that the rise in metal prices will naturally raise the price of the entire program of the shipbuilding industry: “It is obvious that at least the terms of project implementation will be increased,” Gromov said.
Subscribe for updates
and be the first to know about new publications