Customs Union investigates rail wheel imports from Ukraine at request of Evraz, UMMC
MOSCOW. Oct 17 (Interfax) - The Customs Union has opened an anti-dumping investigation into imports of railcar wheels from Ukraine, the Eurasian Economic Commission said in a statement.
The investigation was initiated based on complaints filed by Vyksa Steel Works in Nizhny Novgorod region, part of Urals Mining and Metals Company (UMMC), and Evraz NTMK in Sverdlovsk region.
"The investigation concerns solid-rolled wheels more than 710 mm in diameter used in manufacture and repair of wheel pairs for freight cars, passenger cars with locomotive traction, locomotives, electric and diesel train cars and specialty rolling stock. In addition, during the investigation the department for protecting the EEC domestic market will examine the issue of including the slabs used to produce these wheels," the commission said.
A UMMC representative told Interfax the company welcomes the EEC investigation. "We hope that it will produce a fair decision ruling out unfair competition and that the size of import duties compensates the damages the dumping causes to domestic manufacturers, who are consistently pursuing a strategy of import substitution," the representative said.
The EEC agreement provides for retroactive application of trade protection measures, the representative said. "In practice this meant that given a certain set of conditions, the anti-dumping import duties can be applied retroactively, after the investigation is initiated," the representative said.
A representative at Evraz declined to comment, citing the ongoing investigation.
The two manufacturers accounted for 98.9% of solid-rolled rail wheel production in the Customs Union in the 2011-H1 2014 period.
Imports of those wheels from Ukraine increased 340% in 2011-2013, according to EEC data. The imports accounted for 95.8% of all solid-rolled wheel imports in 2011-2013 and 97.1% of the imports in the first half of 2014.
The market share of solid-rolled wheels produced in the Customs Union shrank by 13.9 percentage points in 2011-2013 and by another 2 p.p. in H1 2014.
At the same time, the imports from Ukraine saw their share of the market increase by 11.2 p.p.
"In the first half of 2014 price competition on the Customs Union market increased. Following a 25.4% reduction in Ukrainian prices, producers inside the Customs Union lowered their prices 21.8%, even though costs rose 16.4%. As a result, sales margins narrowed by 22 p.p. and sales profits fell 86%," according to the EEC materials.
The margin of dumping for the Ukrainian solid-rolled wheels in the July 1, 2013-June 30, 2014 period was 36.3%, according to preliminary estimates.
"The body of evidence concerning these claims is the basis for the decision to begin the dumping investigation," the EEC said.
