The Russian steelmaker Novolipetsk Steel (NLMK) has denied that it has been dumping grain-oriented electrical steel in China, and has stated that the company's tariff rate for the product in question should be set at zero.
According to the preliminary results of the Chinese antidumping (AD) investigation into grain-oriented electrical steel originating from US and Russia announced on December 10 this year by China's Ministry of Commerce (MOC), NLMK's dumping margin was calculated at 4.6 percent, which it is already paying while the Chinese investigation continues. NLMK says the duty will not be an obstacle for its sales in China; however, it intends to present its commentary on the current decision by the MOC.
In 2008, NLMK's sales of grain-oriented electrical steel, also known as transformer steel, amounted to 358,000 mt, of which about 80 percent was exported. During the first nine months of 2009, NLMK sold 98,000 mt of transformer steel, of which 85 percent was exported. China's share in NLMK's exports of transformer steel was less than 13 percent.
According to analyst with Renaissance Capital, Boris Krasnojenov, as reported by Reuters, in 2010 NLMK is expected to produce about 200,000 mt of transformer steel, and could export 80,000 mt of this to China. "The negative impact on NLMK's full-year 2010 cash flow may be estimated at $20 million to $25 million," Mr. Krasnojenov stated. "We do not see any significant impact of the Chinese antidumping duties on NLMK's cash flow in the short-term perspective," he added.
NLMK is one of the world's leading transformer steel producers with a 20 percent share of the global transformer steel market and a 100 percent market share in Russia. Facilities in Lipetsk and VIZ-Stal have respective capacities of 160,000 mt and 190,000 mt of transformer steel. NLMK Group's total transformer steel production capacity is approximately 350,000 mt.