Review of the work on development of Russian metallurgical industry in 2005

The Ministry of Industry and Energy prepared a report for the Russian Government on the results achieved in 2005 with regard to the implementation of the Russian metallurgical industry development plan in 2004-2006. The main points of the report are outlined as per the following. 1. Main results of development of the industry In 2005, production of finished steel products rose 1.6 percent, that of steel pipes rose 10.6 percent year on year to 54.6 million tons and 6.7 million tons respectively. Production of iron ore decreased 2.6 percent to 94.5 million tons during the same period. Production of long products rose 1 percent and that of flat rolled products rose 2.4 percent year on year to 30.4 million tons and to 23.6 million tons respectively in 2005. Output of pipes in 2005 to the index of 2004 was as follows: 103.9 percent of seamless pipes, 114.9 percent of welded pipes, 116 percent of electro-welded pipes. 2. Support the domestic enterprises obtained in the world markets In the framework of the 2004-2006development plan ,in 2005 the work on creation of more favorable conditions for the Russian metallurgical producers in the world market was implemented. In particular, in November 2005, the agreement on trade in certain steel products was signed between Russian Federation and the European Union. According to the agreement, the EU quota on imports of Russian steel products for the year 2006 was increased by 2.5 percent compared to 2005 quota level. In addition, the number of barriers for imports of Russian steel products was removed. In particular, the markets of Egypt and Colombia were opened for the Russian steel products. The prolongation of the antidumping duties imposed by the SAR for imports of HR sheets from Russia was prevented. 3. Protection of the domestic market In 2005, a number of protectionist measures were taken to protect the Russian steel producers in the domestic market. In particular, the antidumping measure against imports of some sort of steel pipes was imposed according to defined dumping margin during the investigation. In addition, the agreement on installation of a yearly quota on pipe imports from Ukraine with five major Ukrainian pipe suppliers was signed. 4. Modernization of the domestic industry In order to create the favorable conditions for improvement of competitive abilities through modernization of Russian metallurgical enterprises, in 2005 the reduction of taxation rates for imported equipment necessary for the modernization of the Russian metallurgical industry was applied.