The Russian steel producer Severstal has announced that in the second half of the current year it has been forced to cut its prices for polymer coated rolled steel products. The main reason for such a step was the "ousting" from the domestic market of Russian producers which has lead to a decrease of output from existing facilities, Severstal said.
"In order to ensure our presence in the Russian market, we are forced to keep prices at parity with imports, despite the fact that the quality of the imported products raises serious concerns," Severstal Cherepovets' sales director Dmitry Goroshkov stated.
Meanwhile, in order to protect domestic producers, together with Magnitogorsk Iron and Steel Works (MMK) and Novolipetsk Steel (NLMK), Severstal has called on the Russian government to initiate an antidumping investigation into imports of pre-painted coils.
In H1 2010, the share of Russian producers in the domestic polymer coated steel market fell from 76 percent to 38 percent, while the share of Chinese products increased by 42 percent, reaching a record 48 percent of overall domestic consumption.
Currently, Russia's polymer coated steel production capacity, including NLMK's new 200,000 mt capacity color coating line, amounts to more than 1.2 million mt per year, which exceeds the country's apparent consumption, while exports of these products are practically nonexistent. This leads to a reduction in output against the background of growth of inventories of both producers and traders.
"First and foremost, we are concerned that sub-quality imported rolled products, poured into the Russian market, are often posed as quality products that match specifications. This creates a security risk in construction and can eventually lead to the decrease in consumer confidence in the use of coated steel in this sector. We are convinced that the development of new regulations for the use of coated steel in construction will be able to limit the supply of products of inadequate quality to the Russian market, but their adoption will take time," Mr. Goroshkov stated.