Bojan Cvijetić says that world inflation is felt in every aspect of the economy, but what is happening in the market of ferrous and non-ferrous metallurgy?!
It’s been going on for centuries, and it seems like every time you turn around, there’s another episode of inflation. But if you look back in time, there were many different types of inflation that affected the economy differently. It is important to understand these differences when looking at how world inflation affects the steel market in particular, as some interesting trends can be seen throughout history that still affect prices today. Steel prices have been steady, but have now started to decline.
As a global commodity, steel is sensitive to changes in demand and supply, as well as to world inflation. In addition, steel is a major component of many industries, including automobiles and construction.
Inflation is a monetary phenomenon. It occurs when the money supply increases faster than the production of goods and services in the economy, causing prices (the average of all prices) to rise. Inflation is also known as price inflation or cost-push inflation because it occurs when costs to producers increase.
Steel prices are highly dependent on the world economy. For example, if there is an economic downturn or recession, then people are less likely to buy new cars or houses. This means they will need less steel than before.
As the cost of living rises, so does the rate of production, which increases the cost of raw materials like steel. The industry is closely related to the demand for new buildings, construction projects and infrastructure development. When these measures are strong, it means more people will buy steel products to build homes, offices or highways.
Bojan Cvijetić, the founder of the company Milco DOO, in today’s interview, explains how world inflation affected the steel market.
Bojan Cvijetić says that there have been changes in the ferrous metallurgy market
“The current situation in the ferrous metallurgy market is exactly the opposite of the situation in other industries. Deflation is present in the market of ferrous and non-ferrous metallurgy. Due to the lack of demand for semi-finished products of ferrous metallurgy, manufacturers are forced to lower the prices of their products.”
What is the situation in the world, and what is it like here?
“The world steel market suffers from a lack of demand, which is largely reflected in the market of Bosnia and Herzegovina. Bosnia and Herzegovina is a small market and any change in the world market is largely reflected in us.”
Do you expect the increase in the price of steel products to stop in the coming period?
“Steel prices reached their peak in April 2022. Since then, prices have been falling. There were attempts by producers to stop the decline at the end of the summer, so prices stabilized briefly, after which a significant price decline continued. I expect the price decline to continue until the end of 2022 .” explains Bojan Cvijetić.
Bojan Cvijetić explains how Milco DOO struggles with changes in the market
“In business conditions when inflation is present, there is a need for additional working capital and the main task in those circumstances is to provide additional working capital. An additional challenge is the growth of business costs.”
How did you manage to raise workers’ wages in the middle of the great global chaos on the market?
“In our business, an adequate personnel structure is extremely important. In the conditions of inflation, a heavy burden falls on the household budget of employees.
As an authorized employer, we made an extra effort and managed to increase the salaries of our employees.
Our company has been operating since 1989. years. We are a family company that cares about workers. I inherited this business from my father and despite numerous challenges, such as the corona virus pandemic and high inflation, we must primarily take care of our employees .
We want them to be satisfied and stay in our company. I think that the move by the Government of Republika Srpska to reduce levies is very good in order to increase salaries. The employer cannot always earn a lot of money, but must give up a part of the income in favor of his employees.
Read : Bojan Cvijetić, owner of “Milco”, increased wages for workers due to inflation
Are you planning to add new products to your range?
“Everything depends on the needs of the market. We constantly listen to the needs of the market and react accordingly.”
While many companies are withdrawing from the market at the moment, Milco is getting stronger – what’s the secret? Bojan Cvijetić says:
“There is no special secret. Through several decades of business, MILCO DOO has positioned itself on the market as a reliable partner. We react quickly and adapt to the market, we are flexible, reliable, our staff is professional and at any moment ready to answer all the challenges they face.”
What projects are you currently working on the most?
“The lack of large projects is precisely the reason why demand is so scarce. There are very few large projects on the market.
Equipping new storage capacities for our needs is underway, and we are heavily involved in that,” explains Bojan Cvijetić.
Bojan Cvijetić: A message to our readers and potential partners
“Try to turn the challenges that the environment imposes on you into opportunities. Work hard. Be consistent. Try to provide security to your partners. Work on your competencies. Success will not be absent.”
Milco is at the disposal of its new customers, to whom it can provide high-quality products at the best market price, with guarantees and certificates. Contact us for details !
