Vladimir Shlyomin

    In early March 2006 news filtered that Ukraine’s companies had received preliminary estimation of new antidumping duties to be imposed on seemless drawn pipes exported to the European Union. That estimation became a result of antidumping investigation initiated a year ago upon request of Voest-Alpine Tubulars, Vallourec & Mannesmann, Benteler Stahl/Rohr GmbH, Dalmine S.p.A. and Tubos Reunidos.
    It should be reminded that after Ukraine was acknowledged a market economy country the following antidumping duties were set for Ukrainian suppliers, namely: 12.6 % for the Dnepropetrovski Pipe Manufacturing Plant, 27 % for the Nizhnednepropetrovski Seampless Drawn Pipe Plant and Nikopolski Seamless Drawn Pipe Plant (Niko-Tube) and 28.2 % for the Nikopolski Steel Pipe Manufacturing Plant (ZAO YuTiST close joint stock company), with the antidumping duties being imposed on all types of seamless drawn pipes. According to Ukrtrubprom, an industrial association of Ukraine’s specialized pipe plants which was established in 1992 and now numbers twelve company –associates, it is expected that the Committee will introduce the new antidumping duties within a period from May1 till June 30 2006. Currently, an effective duty of 38.5 % is applied for five product item codes.
    The proposed antidumping duties will be applicable for various types of pipe products, including machine building purpose pipes, construction pipes, water supply pipes as well oil country tubular goods like oil supply pipes, drill pipes, casing and tubing regularly used for exploration and development of oil and gas condensate fields.
    Ukrainian pipe makers call these duties «unjustified», while representatives of Ukraine’s governmental bodies state their determination to seek reduction of the duties. Despite this, experts believe that Ukraine has no serious chances to produce any influence on the decision of the EU Committee. The matter is that the EU Committee, though acknowledging Ukraine a market economy country, still deems Ukraine’s approaches towards energy resource price formation as «non-market» ones. The Committee concluded that the power supply prices controlled by Ukraine’s government were significantly lower than those in Europe, while prices for natural gas (in 2004-2005) were set under barter agreements with Gazprom. As a result, the Ukraine pipe production cost estimation was based on power and natural gas supply prices currently effective on «surrogate markets», specifically in Romania.
    Leonid Ksavertchuk, the general director of Ukrtrubprom, has called the EU Committee’s approach «a biased one» by adding that "Ukraine’s products have never competed in Europe in the market segment of high quality expensive pipes». According to Mr. Ksavertchuk «the measures undertaken by the EU to protect its manufacturers can be called neither well reasoned nor effective as the vacant market niche will any way be occupied by pipe manufacturers from development countries like China who are pursuing a pretty aggressive policy on the European market».
    Ukraine is actively seeking a way out of this situation. «Our company annually supplies to Europe approximately 8-9 thousand tonnes of seampless drawn pipes that is about 30 % of our company’s entire export volume, – says Yuri Yudin, a sales and marketing director of the YuTiST pipe plant, – We will proceed with our search for new markets and exert efforts at increasing our supplies to the market we have already entered. However, if such efforts fail we will have to reduce volumes of our production.»
    Representatives of Ukrtrubprom believe that introduction of the new antidumping duties threatens Ukraine with a loss of its market niches in 25 European countries for the next five years. "According to experts’ opinion an impending damage to Ukraine’s pipe manufacturing sector may be estimated at $100 million a year," – states the press service of the association.
    Sure, following the well established tradition to see a political intent in any arising problem, Ukraine could not help reproaching the EU Committee for its biased approach towards Ukraine «which has made its democratic choice in favor of European integration». 

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