Government’s fall to affect Ukraine’s steel industry?
Ukraine's parliament decided to dismiss the current government claiming incapability in gas deals with
Russia, adding more to uncertainty in the country. Would it affect the iron & steel industry?
255 of the 455 parliementers voted to dismiss Prime Minister Yuriv Yekhanurov's government on Tuesday, 80 days before the parliamentary elections. The voting for the government's dismissal came when the President Viktor Yushcenko was visiting
Kazakhstan with Russian President Vladimir Putin for
Kazakhstan's President Nursultan Nazarbayev's inauguration after being re-elected.
In
Kazakhstan, Yekhanurov was declaring the increase in gas price from $50 to $95 per 1,000 cubic meters as “fair”, while the opposite voices in the parliament were saying it was “not satisfactory”.
As a part of the conditions required for
Ukraine's accession to the WTO,
Ukraine has to reduce the export duty imposed on
scrap metal exports. The government was planning to reduce the existing 30 Euros per ton duty to 25 Euros beginning from January 2006, but now because of the political conflicts, it seems that the reduction of the duty will take some more time. Meanwhile,
Ukraine's accession to the WTO will also be delayed.
There are also other rumours stating that world's largest steelmaker Mittal Steel may reduce gas
production at its Ukrainian Mill Kryvorizhstal which produces 20 percent of the steel in the country. According to the news, the company is planning to reduce gas
consumption and use coke and higher-grade
iron ore instead of it. Other steelmakers will, obviously, also face a similar pressure and they will fall back in the competition with
Russia for deliveries to
Europe.
On the other hand, on Tuesday, Russian Prime Minister Mikhail Fradkov signed a resolution to impose anti-dumping duties on steel
pipe imports from
Ukraine. The new customs duties vary from 8.9 percent to 55.3 percent depending on the type of
pipe.
Despite all the developments mentioned above, the presidents of
Russia and
Ukraine expressed warm messages in Kazakshtan regarding the future economic relations between the two countries.