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Russia: Dumping Penalties Imposed On Zinc, Steel Exports

Moscow, 5 June 1997 (RFE/RL) - The European Commission (EC) has recently unilaterally imposed penalties on Russian zinc exports.

Similar ruling by the U.S. Department of Commerce on Russian steel exports is expected this week. The ruling ends a U.S. trade investigation that, according to Russian officials, fully involved the government in Moscow as well as the Russian metal exporter and its U.S. attorney in the proceedings.

In contrast, the Russian say that the European move has violated the rules and procedures of the World Trade Organization (WTO).

The Russians say that the European action against alleged dumping of Russian zinc adds to the wave of protectionism sweeping the world against Russia's metal trade.

Last week, the Thai government imposed steep anti-dumping duties on steel exports from three major Russian steel-mills. Alexei Ruzhin, a Russian trade official, said "the level of new duties is very high, and totally blocks our access to the Thai market."

If the U.S. Commerce Department rules that Russian steel exports to the U.S. are unfairly priced, similar decisions can be expected in parallel anti-dumping cases in Canada and Mexico.

The European zinc decision provisionally imposes a 5.5% anti-dumping duty on exports. The tariff is equivalent to between $60 and $70 per metric ton of metal.

Government officials and representatives of Russia's zinc producers said they knew nothing about the EC investigation, until it had ended. They claim the WTO charter, as well as Russia's pact with the European Union on trade, requires an open investigation, notification to producers and exporters, and consultation between the EC and the government in Moscow.

According to reports from Brussels, the EC has until October 4 to reach a final determination on the dumping issue. The Commission must then vote to decide whether to keep or drop the provisional tariff.

A senior Russian government trade official said he thought the EC had raised a concern about Russian zinc prices two years ago. But he and other officials of the Ministry of Foreign Economic Relations said they knew of no formal notification of the Commission inquiry, and had provided no responses to questions concerning domestic and export pricing of zinc.

Svetlana Stepanova, head of the steel industry section of the Ministry of Economics, said she was unaware of the EC investigation or its outcome. Stepanova is a senior figure in the Russian Association of Metal Exporters. The association has a working group composed of government and plant officials to consider anti-dumping cases affecting exports.

The commercial director of the Chelyabinsk Electrolyte Zinc Works, Mikhail Chaplygin, said "we are very surprised by this decision."

He said his company, which is the sole Russian exporter at present, had received no contact from the EC during its investigation: "We were never approached by anybody with a complaint about the dumping prices." Calling the volume of zinc shipments to Europe from Chelyabinsk "laughably small", Chaplygin said "this move is really aimed at creating greenhouse conditions for European producers of the metal."

Chelyabinsk produced a total of almost 115,000 tons of zinc last year. Roughly half was consumed in the domestic market. Another 30 percent of output was tied to tolling schemes, Chaplygin said. Exports in 1996 were between 20,000 and 25,000 metric tons, amounting to about 20 percent of overall production. The exports were spread from the United States to Latin America and Asia, as well as Europe.

"There were no anti-dumping complaints anywhere else," Chaplygin added.

Nikolai Khodov, the general director of the Vladikavkaz Electrolyte Zinc Works, said his plant and Chelyabinsk are the only Russian producers of the metal. Last year, he said Vladikavkaz turned out 60,000 metric tons, but all of this was committed to tolling arrangements with two Swiss trading companies, Euromin and Nova Trading.

The Russian zinc industry has been complaining that plants at Ust-Kamenogorsk and Leninogorsk, in neighboring Kazakhstan, have been selling their metal in Russia at below-cost prices. Officials claim zinc exports from Kazakhstan may be reaching the European markets also at dumping prices. But they are emphatic this isn't true of the Russian metal.