OREANDA-NEWS On 05 October Russian government announced introduction of 28,1% duty for stainless tubes import. Ukrainian manufactures and market experts are convinced that self-restriction on the basis of “country” quotas will become the most effective instrument of market regulation.

On the site of Russian Federation Government there was published resolution #758 from October 28, which introduced 28,1% duty for import of tubes from corrosion-resisting steel with the outer diameter up to 426 mm. The duty does not have an effect on tubes, imported from Belorussia and developing countries, which enjoy the national system of RF preferences, with an exception of Brazil and China. The duty is valid for 3 years; it comes to effect after a month from the day of resolution publication — October 30.

Yuriy Atanasov, CEO of International Holding CENTRAVIS: “Introductions of 28,1% duty for stainless tubes import by RF will, no doubt, effect situation for all Ukrainian suppliers. But we foresaw it and made all necessary preparations. We estimate perspectives of our business development on the territory of RF with confidence and exclude possibility of any business-risks for the company. We made substantial preparations, which included technical modernization of the production base, start of production of tubes of the unique segment, expanding geography of products distribution and many other things”.

More details concerning this can be found on the official site of the company http://www.centravis.com/news-center/news/2009/08/237/

Centravis managers are convinced that 28.1% duty introduction will not have an equal influence on all exporters. To their opinion, duty introduction will entail market share rearrangement only among importers, through reduction of Ukrainian exporters share and raise of Chinese exporters one. This conclusion can be made on the basis of substantial difference in prime cost and final price of seamless stainless tubes, manufactured in CIS and in China. Quota, in its turn, will become an effective instrument of self-restriction and market regulation, which will take into account both interests of Russian consumers and Ukrainian manufactures.

To the opinion of analytics, subquotas for CJSC “CENTRAVIS PRODUCTION UKRAINE” for supply of stainless seamless tubes to Russian Federation for the period of 2009-2011 are reasonable in the following volume: 2009 — 5 516 tons; 2010 — 5 792 tons; 2011 — 6 081 tons.

The proposed volumes of subquotas are based on two factors: the historically settled average share of CJSC “CENTRAVIS PRODUCTION UKRAINE” delivery to Russian Federation in the general volume of consumption of seamless stainless tubes (26,8%) and on the forecast of capacity of the seamless stainless tubes market in RF in 2009-2011.

Yuriy Atanasov, CEO of International Holding CENTRAVIS: “Today there are active negotiations between governments of our states, industry organizations. The subject of discussion is possibility of changing duty for special “country” quotas. We hope that a decision made will take into account, first of all, interests of stainless tubes consumers in RF, the greatest part of which are companies strategically important for the whole economy of the country”.