Antidumping war between Russia and Ukraine

Starting from last year, both Russia and Ukraine initiated a number of antidumping investigations against each other with regard to steel products. From the economic point of view, both countries are trying to protect their domestic markets of steel products and push out the main competitors from there, but the antidumping measures imposed by each side only damaging the metallurgical industries and consumers of both states and usually bury political character. Russian and Ukrainian metallurgical industries were closely interrelating for a long time, where Ukrainian metallurgical enterprises were mainly using Russian origin iron ore in production, and Russian consumers preferred Ukrainian pipes to that of Russian production. The first antidumping measure was the decision of the Russian government in August 2005 to impose preliminary 21 percent duty until December 14 of the same year on imports of Ukrainian steel rebar used in construction industries. The interesting factor in imposition of this particular AD measures is that the barriers on imports of steel rebar from Ukraine were placed in 2002, and by 2005 all factors confirmed that the duties will not be continued since both demand from the side of Russian users and supply on steel rebar decreased over the years. Nevertheless, by decision No791 dated January 2006, Russia prolonged the effect of the duty until August 14, 2007. The next antidumping measure Russia took against Ukraine was on imports of high-carbon ferromanganese. In opinion of Russian ferroalloys producers, the dumping margin of sales of Ukrainian high-carbon ferromanganese in 2004 was 110.9 percent and in January-February of 2005 it was 136.7 percent. However, at the same time from October 2004 to March 2005, the volume of production of high-carbon ferromanganese in Russia fell 33 percent, the share of the domestic market fell to 41.7 percent and inventory of Russian enterprises rose to 115.4 percent. The most problematic issue in the trade policy between two countries is in connection with imports of Ukrainian pipes which from one side were widely demanded in domestic Russian market, from the other frightening Russian producers. As a result of concern of Russian Fund of Development of Pipe Industry, two antidumping investigations were initiated: on imports of pipes of small and average diameter and on imports of pipes of large diameter. The investigation on former finished up with the government decree No 824 dated December 29 2005. According to the decree, the duties in the amount of 11.4 percent for casing pipes, 55.3 percent for bearing pipes, 18.1 percent for pumping pipes, 8.9 percent for oil-gas pipelines pipes and 11.3 percent for boiler pipes were imposed on Ukrainian imports. However, it should be noted that five main Ukrainian pipe suppliers to Russia agreed to voluntarily limit exports and are not affected by the abovementioned Russian duties. Ukraine, on the other hand, in February of this year initiated investigations on imports of Russian steel ropes, cables, bearings, and iron ore concentrate, which Ukraine metallurgical enterprises prefer over the domestic one. Russian side believes that Ukraine does not have justifications on the imposition of AD measures against Russian products and does it only as a response to previously imposed Russian duties on imports of several Ukrainian products. Until now, the only segment which is left untouched by this ’AD War' is that of galvanized steel.