Metal Makers Call for Extension of Ukrainian Rod Duties
In a letter submitted to Russian PM Mikhail Fradkov, the Mining and Metal Trade Union of Russia has requested to extend import duties on Ukrainian wire rods which expire August 14. The Trade Union is sure abolishment of the duties will trigger take-off of Ukrainian rods, driving the national producers out of the $2-billion market. Though the Economic Development Ministry canvasses the issue, the progress could hardly be seen, the metal companies say, pointing out once the formal decision is delayed till August 14, the duties revival will require another prolonged investigation.
Russia’s biggest manufacturers of steel rods for precast units are Mechel, Evrazholding, Severstal, VMZ Krasny Octyabr. In 2004, they accounted for 74 percent of domestic market, which overall turnover stands at around 5 million tons (about $2 billion on year in terms of money). Key rod producers of Ukraine are Krivorozhstal, Enakievsky Metal Works, Makeevsky and Donetsky Metal Plants. The aggregate product capacity exceeds 5 million tons on year.
The 21-percent antidumping duty for Ukrainian rods was introduced July 8, 2002 to expire August 14, 2005. The rod import from Ukraine slid to 174,500 tons in 2004. Now Ukrainian rods are from 1 percent to 3 percent cheaper than the Russian ones.
In the letter addressed to Fradkov, Mikhail Tarasenko, chairman of the Mining and Metal Trade Union of Russia, threatens with the market collapse, if the duties don't survive August 14. “Ukrainian rods will cost 18.4 percent less than the Russian rods,” Tarasenko says. “Moreover, the requirements of the Russian market will be covered in whole by Ukrainian import.” “In view of the general price drop for metal product, duties’ abolishment may really result in the serious redistribution on the market,” Severstal representatives said. “We expect Economic Development Ministry and the government to protect our interests against the subsidized import from Ukraine,” Mechel specified. “It is the only adequate solution in this situation.”
Russian Industry and Energy Ministry backs up the standing of metal makers. “We think the duties should be extended and we have forwarded our conclusion to the Economic Development Ministry,” Industry and Energy Ministry’s spokesmen told Kommersant, promising to submit an inquiry to the Economic Development Ministry next week.
www.kommersant.com
All the Article in Russian as of July 15, 2005
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