FAS convicted MMK, NLMK and Severstal of overpricing flat products

FAS recognized PJSC “Magnitogorsk Iron and Steel Works”, PJSC “Severstal”, PJSC “Novolipetsk Iron and Steel Works” in overpricing.

According to the Federal Antimonopoly Service, since January last year, companies have established and maintained monopoly high prices for hot-rolled flat products in the domestic market.

“The market for hot-rolled flat products is characterized by a stable mix of key players and high barriers to entry. The defendants occupy a dominant position with a share of more than 70%, ”the antimonopoly department explained.

They found that the growth in prices for hot-rolled steel occurred at a faster pace than the growth in production costs. The companies referred to the fact that the prices for hot-rolled steel were allegedly set by the buyers themselves. However, this argument is refuted by a large number of customer complaints received by the department.

At the same time, there was no growth in demand from Russian consumers. With domestic sales unchanged in 2021, the respondents tripled their profits compared to 2019-2020.

In addition, the companies were unable to confirm the fact of unsatisfied demand from foreign counterparties, which indicates the absence of market factors for the growth of domestic prices to the level of export values.

Severstal, MMK and NLMK have been ordered to stop abusing their dominant position.

Cases will be initiated on administrative violations and fines will be calculated for each company.

Earlier, the head of the FAS Russia, Maxim Shaskolsky, said that antitrust fines for Severstal, MMK and NLMK could amount to billions of rubles.

The Federal Antimonopoly Service (FAS) reported on the cases and inspections of representatives of the metallurgical industry after the words of First Deputy Prime Minister Andrey Belousov about the “stuffing” of the state by metallurgists for 100 billion rubles.