MMK agrees settlement with Russian Federal Anti-monopoly Service in case against steelmakers - sources

MOSCOW. June 5 (Interfax) - Magnitogorsk Iron & Steel Works and the Russian Federal Anti-monopoly Service have agreed a settlement in the case against steelmakers, two sources familiar with the matter told Interfax.

The sources said the agreement was reached yesterday.

The FAS concluded a settlement with Severstal in the spring and the Ninth Arbitration Appeals Court approved it on May 27.

In February 2022, the regulator found Severstal and fellow steelmakers NLMK and MMK to have violated antimonopoly legislation by setting and maintaining monopolistically high prices for hot-rolled flat steel products on the domestic market. Prices for hot-rolled steel rose faster than production costs.

In addition, it was established that sales to the domestic market did not increase, while profits tripled compared to 2019-2020. MMK was fined 8 billion rubles, NLMK 6.4 billion rubles and Severstal 8.7 billion rubles.

Severstal, as part of the settlement with the FAS, must pay a fine of about 900 million rubles. In adjusting the size of the fine under the agreement between the company and the regulator a lower bar for percentage of revenue from hot-rolled steel sales in 2021 was used for its calculation. Severstal also partially fulfilled the regulator's earlier demands, developing and presenting to the FAS a trade policy for hot-rolled flat steel.

The Interfax sources said the terms of the settlement with MMK were almost identical.

The Moscow Arbitration Court is due behind closed doors on June 5 to consider a request by MMK to the FAS to recognize the decision as illegal and cancel the department's order and resolution in the case against the steelmakers.