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By John Helmer, Moscow

The Kremlin has yet to agree to a Ukrainian application for the resumption of duty-free quotas for steel pipe imports to Russia. In December, Ukrainian Industry Minister Mykhaylo Korolenko told Bloomberg that there had been an agreement with the Kremlin to reinstate the quotas which were cancelled on July 1 and a penalty duty of 19% introduced instead. In effect, this killed the Ukrainian trade.

Korolenko also claimed that the Russians had agreed to halt an anti-dumping investigation of Ukrainian shipments of steel reinforcement bars.

An Interpipe source has acknowledged that the company managed to deliver its 2013 quota of 120,000 tonnes to Russia before the customs action commenced. Since then, however, Interpipe is estimating it has lost $100 million in sales to Russia, Kazakhstan and Belarus, which form the customs union and its decision-making organ, the Eurasian Economic Commission (EEC).

The Russian Foundation for Pipemaking Development, which represents the domestic pipemakers in Moscow, was asked what decision has been reached in the month since Korolenko’s claim. The Foundation said: “At the moment the Eurasian Economic Commission is conducting the review of the anti-dumping duties. We hope that the results will become known soon and will be objective.”

Industry sources say Korolenko’s announcement was premature, and that until the political situation stabilizes in Kiev, no decision will be taken on providing trade benefits to Kiev. Victor Pinchuk, the owner of Interpipe, is recognized in Moscow to be an active advocate of the Ukraine campaign to join the European Union and financier of the opposition to the Kremlin. By contrast, Rinat Akhmetov, owner of Khartsyzsk Pipe, a specialist in large-diameter pipes for oil and gas pipelines, has not taken political sides. Commercially, Khartsyzsk Pipe is significantly more profitable than Interpipe, according to the last comparative reporting by Dragon Capital.

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