Following the petition submitted to the Russian Federation's Federal Antimonopoly Service (FAS) by the country's gas and oil producers, Gazprom Neft' and Surgutneft'gaz, and also by the Russian Pipe Industry Development Fund (FRTP), on the issue of unjustified price hikes by steel producers, the Russian automobile and construction sectors have now also added their voices to concerns over domestic steel prices.
The Russian Union of Automobile Producers (OAR) has addressed a letter to the Russian Minister of Industry and Energy, Mr. Viktor Khristenko, in which it states that the steel product price hikes of Russian producers Evraz, MMK, Mechel, Severstal and NLMK are unjustified. The OAR emphasized in its letter that in April alone prices for steel used in the automobile sector increased by an average of 38 percent. "This sharp rise in our raw material will definitely lead to a rise in the production costs of Russian automobiles, considerably reducing their competitive ability," the OAR continued.
Meanwhile, the Russian Union of Constructors has also expressed its concerns regarding continuous price rise performed by the domestic steel producers as regards the main construction steel materials. The union stated that the continuation of the price rising tendencies for construction steel will definitely impact the cost of housing and may cast doubt on the implementation of national projects, such as the national program of affordable housing.
In their statements, both industries refuted the justification of increasing iron ore and coal costs as valid reasons for the price rises of the Russian steelmakers.
In addition, both industries have asked the Russian Minister of Industry and Energy to introduce export duties on steel in order to combat the domestic price rise.