At the meeting between Mr Alexander Shohin president of the Russian Union of Industrialists & Entrepreneurs and Mr Bohdan Danilishin minister of economy of Ukraine, the Ukrainian side has come up with a proposal to allot a quota for Ukrainian stainless steel pipe imports to Russia, following Russia's intention to impose a 28.1% protective duty on imports of these products.
Mr Shohin said that on the one hand Russian producers should be protected, while on the other hand consumers must not be affected, and so a golden mean should be found. However, he stated that the introduction of a quota would not be the correct way to solve this issue.
At the same time, Mr Danilishin noted that, due to the forthcoming switching to new technical regulations, the purchase of Ukrainian pipes will be problematic and pipe producers should start to be concerned about the further modernization of their production facilities.
It may be noted that Russia is preparing to impose a 28.1% duty on all stainless steel pipe imports into the country, not only from Ukraine. According to Ukraine's pipe producers' association UkrTrubProm, the duty would affect in a discriminatory way Ukrainian supplies in particular as they account for the majority of stainless steel pipes delivered to Russia.
From 2005 up to the present, Ukraine has been exporting stainless steel pipes to Russia within the framework of an agreement between the countries dated January 13th 2005, according to which Ukrainian companies have accepted voluntary self-restrictions on deliveries of pipes to Russia, limiting themselves to amounts which will not harm Russian producers.
Thus, in the 2004 to 2006 period, imports of stainless steel pipes to Russia from all countries increased by 207%, while imports from Ukraine went up by just 11.9%, which is lower than the growth rate of the Russian stainless steel pipe market. In addition, the association noted that the prices of Ukrainian stainless steel pipes in the Russian market considerably exceeded both the other countries' prices and the prices of Russian products, which meant that the Ukrainian prices were not competitive.
(Sourced from SteelOrbis)
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