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The metallurgical sector of Russia: whether to be the iron curtain

10 October 2016

It is not excluded that the Russian government will revise the pricing policy in respect of steel products. The initiator of consideration of the issue was Alexei Mordashov, main owner of Severstal. The suggestion is to force consumers to buy the metal at a costnot corresponding to the world prices. It will be significantly higher. Clients of «Severstal» say that a proposal of this kind is clearly ignoring market laws. Experts call this approach a attempt the prevention of future pricing disputes. For consumers, fittings and other products will be dispensed at a cost that was observed before the third quarter. After that, the cost on the global and Russian markets went down. Alexey Mordashov is confident that this approach will be fair.

Businessman indicates that from April, users in Russia were dissatisfied with the increase of the cost. They were asked to take appropriate action. However, in may-August the price of rebar fell by 24%, reaching the level below the September 2011 figure. Alexey Mordashov believes that the pace situation could be repeated in 2015. At the end of last year, some factories were forced to suspend activities. It is emphasized that to date, the metallurgists did not show requests for the impact on consumers. While the cost of production for the machinery sector practically is not reduced. The rates of natural monopolies increase.

Representatives of «Severstal» have confirmed that the letter to the government took place. This initiative is a return stroke to the requirements of the manual correction value. Such a proposal was received from consumers. Means the conversion of builders, builders in FAS. According to their results in July it was announced about the upcoming investigation regarding the increase in the cost of rebar. Will take into account the period January-April, the increase was from 34 to 103%. FAS indicates the companies suspected of abuse. These include Severstal, Evraz, Mechel. Consideration of the case postponed until November. Representatives of Evraz and Mechel declined to comment on the initiative of Severstal. What was the reaction of officials of the FAS to the appeal of Alexey Mordashov is still unknown. The letter they had received 05.10.2016 year, but their position has not yet been formed.

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