OREANDA-NEWS. Fitch Ratings says the introduction of US anti-dumping duties on Russian hot rolled steel should not have a significant impact on Russian steel producers as exports to the US tend to be opportunistic and companies should be able to redistribute sales to other markets.

Exports to the US represented 14% of total Russian hot rolled coil (HRC) steel exports in 1H14, much higher than in 2013 or 2012, when US exports represented just 1% and 4% of the total respectively. The 1H14 figures indicate Russian producers have been taking advantage of limited supplies in the US market, due to severe weather conditions and lower US steel output, which pushed up US HRC prices by around USD50 per tonne.

Novolipetsk Steel (NLMK) (BBB-/Negative) was one of the biggest Russian exporters to the US in 1H14. The group sold 128kt of HRC to the US market, or 22% of the company's total HRC exports. Fitch believe the group will be able to either redistribute HRC sales to other markets, such as the Middle East, south America, EU, southeast Asia or increase sales of steel slabs, which will be needed by US re-rollers to offset lower HRC availability and which should not be impacted by the duties. NLMK also owns several rolling mills in the US, which should not be affected by the duties.

Severstal (BB+/Stable), whose sales to the US market account for less than 2% of total revenue, is also likely to redistribute sales to other markets or use HRC internally for production of tubes and other high value-added products. Among other producers, Fitch do not expect any impact on Metalloinvest (BB/Stable), Evraz (BB-/Stable) or Magnitogorsk Iron and Steel Works (MMK) (BB+/Negative) as they have not exported HRC to the US.

Dumping margins are reportedly due to be imposed from 16 December after the US Department of Commerce decided to terminate an agreement suspending an anti-dumping investigation into hot-rolled, flat-rolled carbon quality steel. For the past 15 years Russian steel producers' exports to the US were capped in volumes by quota (1.1mtpy) only but were not subject to imposed duties. The decision follows the introduction of US sanctions on Russia over its intervention in Ukraine in recent months. The duties will reportedly be around 74% for Severstal (BB+/Stable) and 185% for other producers.