Russian pipe manufacturers have reached an agreement with Russian state-run gas monopoly Gazprom to raise prices for large diameter (LD) pipes by 15-17 percent in the first quarter of 2015 as a result of the depreciation of the ruble, according to Russian newspaper Vedomosti. The new prices will apply to pipes shipped on or after January 1.
A Gazprom representative said the parties had agreed on prices for the first quarter, but declined to go into further detail.
If Gazprom had not agreed to the price hike now, prices would have gone up considerably in the second half of this year, one of the paper’s sources said.
According to the agreements, LD pipe prices will now be reviewed on a quarterly basis. A Vedomosti source added that prices would go up again in the second quarter as the current increase did not fully reflect changes in market parameters - pipe mills still have unsold stocks of steel piping bought before the ruble plummeted.
LD pipe producers started talks with Gazprom on price rises at the beginning of January because the price, calculated via a set formula, was outdated as a result of the ruble’s collapse and the increase in the Russian Central Bank’s key lending rate to 17%.