Watchdog suspects steel makers of price-fixing
Russian steel producers are following suit in raising prices, putting pressure on industries from construction and shipbuilding to energy exploration and oil companies.
Tight supplies and soaring global demand, mainly from China, India and other developing countries, helped increase steel prices by as much as 50 per cent since the beginning of the year.
But the hike is hitting Russia’s oil companies the hardest. Pipeline costs have gone through the roof, as Gennady Krasovsky, Deputy Director of Lukoil, explained.
“Metal components take a significant part of the total cost. It can put us into difficult situations if the prices seriously go up,” he said.
Analyst Vladimir Zhukov from Lehman Brothers says the country’s steel producers are not to blame, they're simply following global price trends.
“First you see an increase in iron prices and coking coal prices, which affect steel prices, and because lots of pipe-makers do not produce their own steel, they have to buy it from the market.
In terms of steel prices we expect that towards the fourth quarter of this year we will witness a downward correction,” Zhukov said.
But the Federal Anti-monopoly Service is not convinced. It is wrapping up an investigation into metals producers’ price hikes. Aleksey Ulyanov of the Anti-monopoly Service said Russia won’t sit back if it’s found prices have been fixed.
“Naturally, if steel prices in Russia are rising faster than costs or if several producers simultaneously raise their prices in similar terms, signalling that there might be a cartel we will take action,” Ulianov said.