ECE protects Victor Vekselberg from competitors

Energoprom Group of Viktor Vekselberg and Leonard Blavatnik will retain its status as a monopolist in the market of graphite electrodes in Russia. For this, eventually, Russian metallurgists will pay.
The Eurasian Economic Commission (ECE) can extend for five years anti-dumping duties on graphitized electrodes (GE) of Indian companies, which count 50% of the dumping margin. Protection was requested by the only manufacturer of ETs in the EEMP, Energoprom Management (EPM), Victor Vekselberg and partners. Traditionally, Russian metallurgists are acting against duties, according to which EPM can not cover demand.

ECE has determined that Indian producers of HEG Ltd and Graphite India Ltd were dumped on deliveries to the EEA. The dumping margin during the investigation period - from July 1, 2016 to June 30, 2017 - was 50.39%. ECE proposes to extend the fees for the Indian GoE, effective from 2013, for five years, according to a report published on 1 August. In addition to the general import duty of 5%, the anti-dumping duties for the GoE before January 2018 for HEG were 16.04%, for Graphite India and "other" (but there are no such in India) - 32.83%.

Initiated a second investigation of the EPM of Viktor Vekselberg and partners, the only GE manufacturer in the EAEC. EPM disclosed earlier that they produced 30.6 thousand tons of GE in 2017, and the market capacity, taking into account imports, is about 71,000 tons. But according to the types of electrodes that became the subject of investigation, the production of EPM and the capacity of the market are lower: in 2016 - up to 16 thousand and 39 thousand tons, respectively. At the same time, imports of GE from India fell sharply after the introduction of anti-dumping duties: in 2016, it amounted to only 266 tons against 1.7 thousand tons in 2013, and during the investigation there were altogether 100 tons. Thus, the share of India in the import of the GoE fell from 5.9% in 2013 to 0.4%.

But the capacity of HEG and Graphite India is 160,000 tons per year, production in 2017 is about 123,000 tons, that is, about 23 percent of the capacity was not loaded, and exports rose sharply against the backdrop of global deficit and rising prices, the report says. . It also says that the market of the EAEC remains attractive for foreign producers and there is a threat of growth in supplies.

At the same time, Russian metallurgy complained to the FAS on EPM in 2017, stating that the company, taking into account export shipments, does not meet the needs of the domestic market against the backdrop of a shortage of ET and price increases. Also, EPM imposes unfavorable contracts, believed in the industry. EPM then offered metallurgists long take-or-pay contracts with formula pricing and a discount of up to 30% to spot prices, promising to increase capacity. But so far such contracts are only with TMK and Rusal, although Kommersant sources say that negotiations are also going on with other metallurgists, including MMK and Severstal (the parties do not comment on this).

The EPM told Kommersant that "it is necessary to solve the problem of preserving the industry in the Russian Federation systematically and consistently," including the protection of the domestic market. This requires stable regulatory conditions and the existence of long-term contracts with metallurgists, the group believes. EPM is "ready to meet the needs of the domestic market" and began expanding its capacities - in 2020, the release of the UHP brand will grow by 60%. But in the "Russian Steel" (the union of metallurgists) are disappointed with the conclusions of the ECE. "We consider the prolongation of fees unreasonable and worsening access to the goods, because there is a deficit in the market, and the Russian producer is not in a position to fully meet the needs of metallurgists," Marina Ivanova, the vice president of the association, told Kommersant. According to her, metallurgists "will present their positions within the framework of the investigation".