The Russian Federation's Federal Antimonopoly Service (FAS) has completed its investigation into the compliance by several Russian steelmakers with Russian antimonopoly law in their prices for steel used in the production of oil and gas pipes. The producers in question are NLMK, MMK, Severstal and Ural Steel.
As a result of the investigations, FAS has determined that there were no violations of Russian antimonopoly law by NLMK, MMK, Severstal and Ural Steel in their prices for steel used in the production of oil and gas pipes. According to the FAS' determination, the prices for steel products of these steelmakers were rising slower than their production costs.
However, due to its concerns regarding the situation created by the continuous price rise for steel in the Russian domestic market, FAS has made some recommendations to the domestic steelmakers in connection with their price determination policies.
Thus, in compliance with the instructions of the government of the Russian Federation, FAS has recommended to the domestic steelmakers to conclude long-term agreements with both raw material suppliers and end-users of steel products. Under the long-term contracts, the volume of deliveries (regarding both raw materials and finished steel supplies) will be fixed while a price calculation formula will be provided. The price calculation formula will allow for the revision of prices on a quarterly basis depending on the fluctuations in raw material prices.
In addition, FAS has decided to monitor domestic prices on a quarterly basis for steel strips used in the production of oil and gas pipes. In the event of violation of Russian antimonopoly law, FAS is to take necessary measures.
Moreover, FAS has requested the Expert Council for Metallurgy under FAS to conduct an analysis on how tariff regulations would impact on the domestic market for steel products.