FAS starts probe against Russian HRC mills for sharp local price hikes

FAS starts probe against Russian HRC mills for sharp local price hikes

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Russia’s Federal Antimonopoly Service (FAS) has announced it has started investigations against local flats producers – NLMK, MMK, and Severstal – regarding whether the sharp increase in local sheet prices, seen within past weeks, was justified and whether it contravenes the antimonopoly law.

According to sources, FAS has initiated the cases against the mentioned three mills regarding the alleged non-justified price increases, based on incoming claims. Moreover, FAS has concluded that the mills’ acts contain the features of keeping a monopolized high price for hot rolled flat products. The agency stated that the price increase for flat steel had been at a more rapid pace compared to the uptrend in the raw materials segments. In the meantime, demand from the local users has not seen a tremendous rise, and so it could not serve as the reason for hot rolled sheet (HRS) prices to rise so much. “Such things happen from time to time here in Russia. There will be an investigation and an evaluation, but we do not expect any significant negative outcome as the mills’ actions were maintained in line with the rules,” a source told SteelOrbis.

Moreover, the Russia-based flats producers have underlined that in the recent couple of months, when the prices were rising, their price policies were based not only on the local market developments but on the balance with export destinations too. In particular, prices in the EU and Turkey have been rising steadily and in big jumps, providing suppliers with good margins. Currently, local offers for the HRS are ranging within $940-1,042/mt (RUB 83,000-92,000/mt) CPT Moscow, with the higher end belonging to Severstal. Export levels are at $1,120-1,140/mt FOB Baltic Sea and $1,000-1,020/mt FOB Black Sea, according to the latest information. “Even despite the higher export prices, local buyers are still the priority for us. But the prices have to be balanced,” a producer told SteelOrbis.

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