The association of Russian iron and steel producers Russian Steel has announced that it has applied to the Ministry of Economic Development of the Russian Federation with a proposal to hold consultations with the Ukrainian government over the violations in Q3 and Q4 2010 of the agreement between the countries regarding the regulation of rebar exports to Russia, as well as over the extension of the agreement for the period 2011-2014. The three-year agreement between the countries expired on December 31, 2010.
According to the data issued by Russia's Federal Customs Service, in Q3 2010 Ukraine exceeded the agreed quota of 140,000 mt for this period, exporting 152,000 mt of rebar to Russia. In addition, in October-November 2010, Russia's rebar imports from Ukraine totaled 78,900 mt compared to a fixed quota of 60,000 mt for Q4. Thus, Russian Steel noted that Ukraine systematically violated the agreement.
In addition, Russian Steel said that after the global financial crisis rebar consumption in the Russian domestic market fell by more than 30 percent to 7.3 million mt, while demand is not expected to reach pre-crisis levels until 2012-2013. Thus, the increase in rebar imports would lead to a significant reduction in capacity utilization levels of domestic steel producers.
As SteelOrbis previously reported, according to the information issued by the Ukrainian Ministry of Economy, in 2010 Ukraine utilized 93.54 percent of its 2010 annual quota for rebar exports to Russia of 400,000 mt, supplying a total of 374,169 mt.