Kommersant learned about the FAS proposal to limit NLMK’s profitability to the level of 2019
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In particular, the Federal Antimonopoly Service proposed to limit prices for hot-rolled flat steel, taking into account changes in the cost of iron ore (IOR) and coking coal concentrate. IN NLMK, in turn, believe that such a measure will lead to destabilization of the economy. “The company is convinced that pricing for hot-rolled flat products in the Russian market has been and remains economically justified and meets the requirements of antimonopoly legislation,” a company representative said.
This proposal was received from the FAS as part of negotiations on a settlement agreement between the regulator and metallurgical companies NLMK Vladimir Lisin, MMK Viktor Rashnikov andSeverstal» Alexey Mordashov. In April 2021, the Federal Antimonopoly Service initiated a case against them on the fact of establishing and maintaining a monopoly high price for hot-rolled steel in the Russian market since January 2021. It was clarified that the combined share of companies in the hot-rolled steel market is 70%.
According to Kommersant, the FAS proposal will lead to the establishment of the profitability of enterprises at the level of 8-10%, which is not enough to maintain production and carry out repairs. IN NLMK also added that limiting profitability at the level of 2019 will lead to a decrease in tax payments to the budget and the emergence of risks of a reduction in production volumes.
The rise in prices for metals on the world and Russian markets began at the end of 2020. According to the Rusmet rating agency, a ton of steel reinforcement at the beginning of 2021 cost 68,653 rubles, and on June 18 of the same year – 79,127 rubles. Rising prices boosted company earnings:Severstal» increased IFRS revenue for the nine months of 2021 by 63%, NLMK – by 69%, MMK – by 87%.
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