7 Jun 2024 13:56

Russian Federal Anti-monopoly Service, MMK have signed settlement agreement in case against steel producers, NLMK yet to do so - FAS chief

ST. PETERSBURG. June 7 (Interfax) - The Russian Federal Anti-monopoly Service and Magnitogorsk Iron & Steel Works have signed a settlement agreement in the case against steel producers, while NLMK has yet to do so, FAS chief Maxim Shaskolsky told reporters on the sidelines of the St. Petersburg International Economic Forum.

He said that in the cases of three steel producers, Severstal , MMK and NLMK, there were "certain similar positions" but that the decision on the settlement with Severstal did not automatically means the same decision would be reached for the others.

Two sources told Interfax this week that MMK and the FAS had agreed a settlement in the case against steelmakers. The FAS concluded a settlement with Severstal in the spring and the Ninth Arbitration Appeals Court approved it on May 27.

The Moscow Arbitration Court in a session held behind closed doors on June 5 decided to terminate the proceedings in the MMK case to invalidate the decision and order of the FAS, according to the case file.

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.

According to Interfax's sources, the terms of the settlement agreement with MMK are generally identical and envisage the payment of 10% of the initial fine.