ЕЭК продлила расследование по импорту оцинковки из Украины (c) shutterstock.com(c) shutterstock.com

The anti-dumping investigation will last until 28 December

Following a preliminary investigation, the EEC proposed in early October 23.9% and 17% anti-dumping duties on HDGC from Ukraine and China respectively. The duty will be imposed for a term of 5 years.

As predicted by GMK Center, this measure is a response to Ukraine’s decision dated June 2019 to impose a 47.57% anti-dumping duty on Russian HDGC for a term of 5 years. A 22.78% duty was applied to China as well.

It should be reminded that the anti-dumping investigation was initiated in the fall 2018 by Ilyich Iron and Steel Works of Mariupol. The plant holds around 35% of the domestic HDGC market. Russia started the anti-dumping investigation earlier, on 29 June 2018.

According to the EEC report, the growth in consumption of HDGC in the Member States of the Eurasian Economic Union (EAEU) amounted to 8% from January 2015 till late 2017, whereas imports from Ukraine increased by 17.4%. This led to a reduction in the share of products produced in the EAEU.

Prices for Ukraine-made HDGC were lower, prompting a drop in the production profitability and sales in the EAEU Member States.

“We assumed that supplies of HDGC from China and Ukraine aimed at dumping and affected the Russian market. Now we have proofs of our assumption,” said a representative of Severstal that initiated the investigation in Russia, in his commentary on the EEC’s proposal.

Implications of Russia’s retaliatory action may affect Ukrainian producers. According to GMK Center, Unisteel exported only 3.6 thousand tons of HDGC to Russia in 2018 (7% of its total output), whereas Ilyich Iron and Steel Works supplied 83 thousand tons.

In 2017, Ukrainian producers exported 126.1 thousand tons of HDGC to Russia worth over $74 million, or around one third of Ukraine’s HDGC market.

“Ukrainian companies will start selling hot-dip galvanized coil in the domestic market, as Russian importers have been ousted by duties. It will be difficult to quickly redirect supplies of these several tens of thousands of tons to other markets,” says Andrii Glushchenko, GMK Center analyst.

However, given the limited volume of the domestic market, Ukrainian producers may hold back the development of HDGC production.