Novolipetsk Steel NLMK, Oil and Gas

NLMK and Severstal file lawsuits against the European Commission

On October 28th, both companies filed lawsuits to the European Court of general jurisdiction against the European Commission, the Court's website reports.

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“NOVATEK” extends contract on the supply of 2.8 billion cubic meters of gas per year with NLMK until 2025

“Novatek” has extended contract on the supply of 2.8 billion cubic meters of gas per year to NLMK until 2025, runs the company’s statement.

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Brussels starts another investigation against Russian metallurgical companies

Russian metallurgical companies have become the object of a new investigation of the European Commission (EC): local steelmakers complained of dumping shipments of flat hot-rolled from Russia and four other countries. But, according to the Kommersant’s sources, for a while only 6% of the dumping margin is imputed to the Russian metallurgical companies, and a possible duty of 6-10% will allow them to maintain the basic supply volumes. Analysts estimate the possible loss of the Russian participants of the industry in such situation at only $50-60 million of EBITDA per year.
The EC has initiated the anti-dumping investigation on imports of hot-rolled flat products from Russia, Serbia, Brazil, Iran and the Ukraine. It was started at the request of the steel lobby Eurofer, filed on May 23, the Bulletin of the EC informs. The investigation will concern uncoated flat hot-rolled except electric steel and stainless steel. The Commission will examine the delivery for the period from July 1, 2015 to June 30, 2016 in order to fund the dumping and injury to local producers, as well as the situation in the period from January 1, 2013 to assess whether the tendency evolved then, threatening the EU steelmakers. The investigation will take up to 15 months, the preliminary duties can be introduced in nine months - in spring of 2017.

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Gazprom’s statements make troubles for NLMK

As the Kommersant has found, following Rosneft and Gazprom metallurgical companies have asked not to disclose publicly information. NLMK complained Dmitry Medvedev on the statements of Gazprom that the price of gas in Russia was underestimated and subsidized economy. This, says the owner of NLMK Vladimir Lisin, became an argument for the introduction of US countervailing duties. The Government examines the situation. Gazprom officially promises to continue publishing "objective pricing picture", but most of the statements that caused the Mr. Lisin’s dissatisfaction, disappeared from the monopoly’s website.
Chairman of the NLMK’s Board and owner of the companyVladimir Lisin applied to the Prime Minister Dmitry Medvedev in mid-May with a request to assist in the "exclusion of information about subsidizing the Russian industry, non-market or low gas price level from all public sources". As the letter noted, from 2015 "a new tool of trade combat" is applied against Russian exporters - countervailing investigation, by results of which duties are set on the basis of evidence of state subsidies, received by the exporter.

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European Commission doesn’t take into account arguments of Russian metallurgical companies against duties

The European Commission, the Russian Ministry of Economy and metallurgical companies have discussed the situation around the EU anti-dumping duties on Russian rolled metal and possible violations during the inspection, by results of which they were introduced. The companies have a lot of claims to the conclusions of the EC, including with regard to the behavior of its members who allegedly have explicitly declared their "hatred for Russia". But for a while, according to the Kommersant’s information, the Russian side hasn’t been able to seriously affect the situation, although the European officials have promised to "take into account" received objections and comments.
On Friday, consultation on the preliminary results of the anti-dumping investigation in respect of the supplies of Russian cold-rolled products in Europe took place in Brussels. The meeting was attended by representatives of the European Commission, Ministry of Economy of the Russian Federation, NLMK and Severstal. Preliminary results of the investigation were published in February. As a result, the mode of "non-cooperation" was applied to Severstal and Novolipetsk Steel and temporary duties in the amount of 25.4% and 26.2%, respectively, were introduced. In late May, the European Commission increased the duty to 34.1% for Severstal and to 36.1% for NLMK and other companies. The only exception was Magnitogorsk metallurgical plant (MMK), for which the duty was reduced to 18.7%. The Commission’s report explains the increase in the duties with the 63.8% final dumping margin of Severstal and 68.3% of NLMK and others, besides MMK.

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The EC accuses Russian metallurgical companies of “non-cooperation”

The European Commission has adopted the mode of "non-cooperation" against Severstal and NLMK, the two main suppliers of cold-rolled steel in the EU, which allowed it to establish protective import duties at the level of 26%. The final amounts of the fees will be announced in August – if it is saved, the Russian steelmakers may lose about $300 million per year. At the same time, a new investigation in Brussels could threaten the companies - already on the hot-rolled metal.
Last Friday, the European Commission published the preliminary results of the anti-dumping investigation in respect of cold-rolled flat products from China and Russia and introduced temporary duties for Russian metallurgists. Every year, Russia exported to the EU up to 1 million tons of cold-rolled steel to the amount of about $300 million, the main suppliers are Severstal of Alexei Mordashov (250-300 thousand tons), NLMK of Vladimir Lisin (about 300 thousand tons) and MMK of Victor Rashnikov (150-200 thousand tons). During the first 11 months of 2015, the import of these products from Russia to the EU, according to the European steel lobby Eurofer, made up 850 thousand tons.

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Novatek presses Gazprom from Lipetsk

Next year, Novolipetsk Steel (NLMK) of Vladimir Lisin will change its gas supplier, left Gazprom and signed a contract with Novatek. Perhaps, in conditions of surplus on the market and start of gas exchange trading, NLMK achieved more favorable contract terms than it had with Gazprom. This transaction will allow Novatek to close a part of the gas volumes, which will be free since the next year after the expiration of the contract with Inter RAO UES.
NLMK has signed a five-year contract with Novatek for the supply of gas, the company reported yesterday. The contract amount is 2.8 billion cubic meters per year, it will enter into force from 2016 and will cover "100% of the needs of Russian enterprises of Novolipetsk Steel". Now NLMK has a valid contract with Gazprom. The metallurgical company reported to the Kommersant that under the contract with Gazprom NLMK has the opportunity "to buy 2.6 billion cubic meters of gas per year, but this year NLMK began to actively buy gas at SPIMEX, and "in several months the purchases covered 70% of the needs". NLMK doesn’t disclose the reasons for the transfer to the purchase from Novatek and the contract price, but says that the principle of take-or-pay is not included in the contracts.

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NLMK sells Severneftegaz for $10.1 million

The Board of Directors of NLMK has approved the sale of Severneftegas, the metallurgical company reports.
"To approve the transaction on the sale of 51% stake in  Severneftegaz, owned by NLMK, to GRT Investments Ltd for $10.105 million," – the report says.

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Half of pipes necessary for Power of Siberia have been delivered to Yakutia

​Over 200 thousand tons of pipes have been delivered to Yakutia for the construction of Power of Siberia. This is a half of the necessary volume.
Currently 216 thousand tons of pipes have been shipped, this is 49% of the total volume (plan – 439 thousand tons). This winter over 185 thousand pipes will be welded in the Olekminsky district.
The total volume of cargo which will be delivered in the navigation period for the construction of Power of Siberia is 800 thousand tons. The navigation will be over in late September-October.
The cargo shipment is held according to the schedule. The first shipment started in May.

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Steel production in Russia decreases

Russian metallurgists reduce steel production: in June they reduced the volume by 4.3% to 5.5 million tons. The market participants explain that at the beginning of the year an abnormal demand was due to concerns of further devaluation of the ruble, caused, including, overstocking. According to pessimistic forecasts, in 2015, the demand for steel in Russia and the CIS countries will decrease by 15%. The production of pipes is growing, but Gazprom has already canceled a number of large tenders.
The production of steel in Russia again began to decline, the data of the Russian Statisctics Committee shows: in June, steelmakers reduced the output by 7.5% to 5.5 million tons. Back in May, the fall made up only 1.6%, and in April there was an increase by 0.6%. By results of the first six months, it was managed to keep the fall at symbolic 0.2% to 34.9 million tons, and rolled products - at 0.6%, to 30 million tons.

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