EU imposed provisional anti-dumping duties on cold-rolled steel from the three Russian producers – Magnitogorsk Iron and Steel Works (MMK), “Severstal” and Novolipetsk Metallurgical Combine (NLMK). The corresponding decision was published in the Official Journal of the EU
The highest duty level was established for NLMK -. In the amount of 26.2%, for the “Severstal”, it was 25.4%. The lowest level is defined for MMK products – at the level of 19,8%
In addition to the Russian metallurgists under the anti-dumping duties were and steel manufacturers in China -. In particular, the group Angang and Shougang <-! place 6336149, / business / 2014/12/10 / 6336149.shtml, nm2015 / v2 / article / incut, incut2_link ->
But the level of duties against producers China is much lower than against Russian companies.
For Angang and Shougang were set fee of 13.8 and 16%, respectively.
The decision was not unexpected. The fact that the European Commission intends to adopt a decision not in favor of Russian manufacturers, it became known in late January of this year. An anti-dumping investigation against steel products from China and Russia was launched in May last year after a complaint sent April 1, 2015 the European Association of Steel (Eurofer), which includes major steel mills of the European Union – ThyssenKrupp, ArcellorMittal, Ovako, Tata Steel Europe, Metinvest , Vorskla, CELSA, BSW and others, which account for about 25% of steel production in the region
How the EU’s decision responded to the Russian manufacturers
Russian steel companies are convinced.? EU decision is erroneous and contrary to the norms of the World trade organization (WTO)
«Deliveries are made at market prices, in strict accordance with international law”, -. explained in MMK. Moreover, metallurgists believe that European regulators are not quite objectively conducted an investigation
«All the Russian side’s arguments and the facts have been ignored in the course of the investigation used incorrect source data”. – NLMK noted.
«were filled and submitted in a timely manner all the anti-dumping questionnaires from manufacturers and traders to suppliers of raw materials. Were organized and carried out verification visits at the company’s plants, more information and an offer of “Severstal” to conduct additional checks have been rejected by the European Commission “, – told” Gazeta.ru “in” Severstal »
Introduction of fees “is a direct violation of WTO law”, which provides a common methodology for calculating anti-dumping duty and clear procedural rules, believe in “Severstal».
The company pointed out that the EU’s decision conflicts with paragraphs 2, 3, 5 and 7 of Annex 2 of the WTO Anti-Dumping Code. In particular, paragraph 3 states that “all the information verifiable <...> which is provided in a timely manner, <...> should be taken into consideration when making a determination.” Now Russian companies intend to challenge the decision of the EU to the WTO, but this process may be delayed due to bureaucratic formalities, experts say.
Why European steelmakers complain of Russia and China
Over the past five years, Russia has significantly increased supply of steel to the EU. If in 2011 China exported to Europe more than the steel products than Russia (.. 651.7 thousand tons against 466.2 thousand tons), then by 2014 the situation has changed: the Russian companies began to supply Europe with more metal than China (724 8 ths. tons versus 620.1 thousand. t).
It is also radically changed and the price ratio between the Russian and Chinese products. In 2011, the average price for imported Russian steel exceeded the price of Chinese products: the Russian companies on average sell a ton of cold-rolled steel for € 630, and the Chinese – for € 619
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By 2014, the Russian metallurgists began to offer more attractive prices: the average price per tonne of rolled products decreased to € 489, while Chinese products sold at € 505 / t.
According to Eurostat, the share of Russian cold-rolled steel rose to 10.1% in the European market by the end of 2014. In the period since 2011 it has increased by 1.7 times, from 5.9 to 10.1%. The share also increased Chinese steel, but by only 0.4 percentage points, from 8.3 to 8,7%.
As far as the European market is important for Russia
The European market for three Russian companies mentioned in the European Commission’s decision, one of the three basic in terms of revenue.
So, NLMK exported to Europe gave 18.3% of total revenue, according to the ’2014 annual report. The share of European buyers accounted for almost 18% of the proceeds of “Severstal” in 2015, according to the company’s financial statements. With regard to the supply is cold-rolled, for the “Severstal” the amount is not so great -.. About 200-250 thousand tons per year, according to a source close to the company
And just for CMI Middle East region is more important: if the share of European buyers in the first nine months of 2015 accounted for 7% of the supply, the sale of products in the Middle East provided 14% of revenues, according to a financial CMI report for January – September 2015
Where. now sell steel
Affected companies can redirect exports to other markets, especially the Middle East and Asia. However, exports to the Middle East suffered greatly because of the Russian-Turkish conflict. In addition, the volume of these markets is not as large as the one that went to the European Union
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For example, NLMK to the Middle East, including Turkey, accounted for about 6% of revenue, in “Severstal” – 5%. In the Asian region and all accounts from 1 to 3% of sales revenue.
In the near future in the Middle East and Asian markets could intensify the competition between Russian and Chinese steel companies.
China in recent years, faced with a reduction in domestic demand, which has led to explosive growth in exports of steel products outside of China. According to Mysteel consulting firm, more than 30% of Chinese steel exports in January – November 2015 were in the ASEAN countries, 12.1% – in South Korea and almost 10% – Iran, Iraq and the Gulf
<. h4> Why does the European Union went on this step
For the Russian steel companies is a serious blow, the volume of Russian products to the European market were great. European regulators decision can be explained by two factors, explained in a conversation with “Gazetoy.Ru” Andrew Tretelnikov, IR Analyst TCS Partners.
«Firstly, the political component is seen, it is indirectly confirmed by the fact that against Russian steel companies introduced 26 per cent duty, and against the Chinese – only 16% »
But the main reason, according to analysts, lies in the fact that” the steel industry is of strategic importance. for European countries. Their actions are understandable, they are protecting their industries and reduce strategic risks. ”
At present, European steel companies hardly tolerate the current low level of prices for steel products.
How this will affect the prices
EU decision on the introduction of duties on imports of steel “would reduce competition in the European market and, consequently, a possible rise in prices for cold-rolled steel” from Russia and China, forecast to NLMK. This situation can be beneficial for NLMK companies located in Europe, which are currently underutilized and whose capacity for the production of cold-rolled steel is about 850 thousand. Tonnes.
On the prices for steel products on the domestic market of the EU’s decision is unlikely Do have a significant impact, sure Tretelnikov:
«Planned steelmakers increase in prices for hot-rolled and cold-rolled products, most likely, will still happen, because this increase – in rubles, whose quotes the dollar and the euro in recent months significantly sagged ».
In general, the introduction of fees would have a negative impact on revenue. “But it’s not critical – Tretelnikov said. – The positions of Russian steel companies is quite strong thanks to the high export allowance »
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