Translated material
Almost rusty
It took the government two years to protect the Russian market from cheap nickel-containing rolled steel from the EU
After more than two years of proceedings and investigations, the Russian government, “in order to protect the economic interests of Russian producers of nickel-containing rolled products,” issued a resolution to impose protective duties on this product from the European Union. The domestic producer that the authorities protected in this way is the Mechel group .Nickel-containing rolled products are used, in particular, in the production of machinery and equipment, in construction, finishing, and are widely used in rocketry and shipbuilding. As stated in the government decree dated February 17, published yesterday, the anti-dumping duty on corrosion-resistant flat products containing 2.5% by weight or more of nickel from European Union member states imported into the customs territory of Russia is subject to a duty of 0.84 euros per kilogram (or 840 euros per ton) excluding the weight of packaging materials and packaging containers. The resolution comes into force on March 20.
The investigation was launched at the request of the Mechel group and other Russian manufacturers of this type of product that supported it - the Serp and Molot and Red October plants (now these enterprises are being merged into a single company Rus-Spetsstal) at the end of 2004. In August 2004, the Chelyabinsk Metallurgical Plant, part of Mechel, appealed to the Ministry of Economic Development with a statement on the application of anti-dumping measures to the import of stainless nickel-containing sheets from the EU, demanding the establishment of a 134 percent duty on the import of this product. At that time, its market price averaged $1,650 per ton, and it came to Russia at an average of $710 per ton. And manufacturers demanded the establishment of import duties on nickel-containing rolled products in the amount of the dumping margin. According to market experts, it was not the manufacturers (in particular, the Luxembourg-based Arcelor and the Finnish Outokumpu), but the traders who were to blame for the dumping: they supplied rolled products to Russia that were not in demand on the European market.
According to Vremya Novostei, the total capacity of the Russian market for nickel-containing rolled products in 2004 was 90.2 thousand tons. In the total volume, the share of imports accounted for 54% (49 thousand tons), more than 75% of imports (more than 40 thousand tons) were supplied from the European Union countries. Mechel's share in the Russian market was then 35% (31 thousand tons). The share of other manufacturers accounted for slightly more than 12% of the market. Due to dumping prices for this type of product imported from European countries, in the next two years Russian manufacturers were forced to reduce production and supplies to the domestic market. Thus, in 2005, when the total market volume increased to 106 thousand tons, the volume of imports increased to 81.5 thousand tons (77%), while 55 thousand tons were supplied from the European Union to Russia (52% of the total volume market and 67.5% of imports) of nickel-containing rolled products. And the total volume of supplies from Russian producers amounted to about 25 thousand tons.
Mechel and other Russian producers really suffered seriously from European dumping. In 2005, Mechel was even forced to temporarily stop the production of cold-rolled nickel-containing steel. Therefore, at the end of that year, the company reduced product supplies to the domestic market by 2.5 times, to 12.5 thousand tons compared to 31 thousand tons in 2004. However, production was resumed in September. As a source at Mechel told Vremya Novostei, this decision was caused by the desire to maintain its market share of this type of product.
In general, the aspiration paid off, and at the end of last year, Mechel actually managed to regain the market share it occupied in 2004: 30% of the market with 36 thousand tons of nickel-containing rolled products. However, other Russian suppliers have reduced the volume of supplies to 8 thousand tons. Imports amounted to 70 thousand tons (61.5% of the market), a little more than half of it came from the EU countries. The total volume of the nickel-containing rolled products market in Russia last year increased to 114 thousand tons.
Therefore, Russian manufacturers of this type of product are very pleased with the government’s, albeit belated, but nevertheless, from their point of view, absolutely necessary measures. “We are satisfied with the introduction of an anti-dumping duty on stainless nickel-containing flat products from EU countries, despite the fact that more than two years have passed since we filed an application for the introduction of an anti-dumping duty,” Mechel told Vremya Novostei. -- Protecting the domestic market from unfair competition and establishing equal competitive conditions for all market participants is the responsibility of the government. The introduction of a duty will allow domestic producers of stainless nickel-containing flat products to return this highly profitable part of the Russian market and compete with import supplies at market prices. As for our company, which was one of the initiators of the anti-dumping investigation, this measure will allow us to increase the production of this product at the Chelyabinsk Metallurgical Plant by approximately 40% in 2007.” Those. after the introduction of duties, Mechel can supply about 50 thousand tons of nickel-containing rolled products to the Russian market. The company expresses the hope that after the expiration of anti-dumping duties in three years, suppliers of nickel-containing products from Europe will become more conscientious and will abandon attempts to dump on the Russian market.
Analysts generally reacted favorably to the government's decision. But they consider the reaction somewhat belated. “The time frame for making a decision was delayed quite seriously,” says Dmitry Parfenov, an analyst at the Prospekt Investment Group. “The decision to introduce duties was made slowly,” agrees Kirill Chuiko from the Uralsib Federal Group. From the moment the application was submitted for consideration to the Ministry of Economic Development and Trade until the government decree was adopted, the market also changed significantly. Due to the rapid increase in nickel prices (now a ton of nickel on the market costs about 40 thousand dollars, in 2004 - 15.5 thousand dollars), the cost of nickel-containing rolled products has also increased: compared to 2004, 2-- 2.5 times. Mr. Parfenov also points out the following: “The issue of dumping concerned much more not manufacturers, but traders working under “gray” import schemes. Apparently, Mechel fought with them and asked them to put things in order with customs clearance.”