Impact of EU AD duties on Russian pipe industry

According to the data of Russia's Fund of Development of Pipe Industry (FDPI), Russian pipe exports to the European Union (EU) have fallen to one seventh of what they were as a result of the EU's decision of June 27, 2006, to impose antidumping duties on imports of Russian pipes of certain types. In addition, Russian pipe production has decreased by 300,000 metric tons since the AD duties came into effect. The FDPI has also pointed out that whereas the Russian pipe producers were forced to limit their pipe exports to the EU, the European producers upped their pipe exports to Russia by 47 percent. As the data shows for the January-August 2006 period, EU exports to Russia of pumping-purpose pipes and pipes used in the oil and gas industry rose by 154 percent year on year. The largest rise in European pumping-purpose pipe exports to Russia during the period in question was achieved Spain with a rise of 970 percent, followed by Finland up 177 percent and Austria up 105 percent. As for EU exports to Russia of pipes used in the oil and gas industry, Lithuania had the highest increase at 960 percent, followed by Estonia at 363 percent, Finland at 194 and Netherlands at 148 percent. These enormous rises in the export deliveries from the EU states have led to a decrease of the market share occupied by the domestic producers, negatively affecting their financial situation. FDPI director, Mr. Alexander Deineko, has stated that if the EU does not remove the AD duties imposed against Russian pipe exports, the FDPI will then propose the imposition of counter measures against EU pipe imports. As for the market players, the Russian pipe producers have tried to extricate themselves from this difficult situation in different ways. For instance, one of Russia's largest pipe producers, TMK, switched to the North American market after the AD duties' imposition. Moreover, one of the most effective ways to overcome the EU duties has proved to be the acquisition of production facilities in the EU or the creation of joint ventures with European producers.