MOSCOW, July 8. /TASS/. Russian steel makers Severstal and MMK Group may lose $80 mln, $60 mln on EBIDTA margin respectively because of the EU duties on steel products, according to an analytical review by Aton.
These losses account for about 5% of consensus-forecast on EBITDA for Severstal in 2016 and up to 4% for MMK, analysts said.
"The domestic market still remains the key one for MMK. The company supplies metal products to the EU at market prices strictly complying with international requirements. MMK plans to use all legal means to dispute the decision on introduction of duties," an official with MMK told TASS.
"Considering harsh violations of the legislation by the European Commission when calculating dumping margin in the current investigation on hot rolled mill products, Severstal together with its clients in EU countries will take all efforts to ensure the objectiveness of the investigation to ensure that it was not politically engaged," an official with Severstal said.
On Thursday, the EU launched an anti-dumping investigation with regard to Russian hot rolled steel products.
The investigation in respect of hot-rolled steel exports from Russia to the EU will last 15 months.
The European Steel Association (Eurofer) complained that the five countries, including Russia, had increased supply of hot-rolled steel products to the EU. Russia annually supplies about 2 million tonnes of hot-rolled steel to the EU.
In the first quarter of 2016 the EU already introduced duties of 20-26% for cold-rolled steel from Russia and increased them to 19-36% in May.
Severstal is the largest supplier (about 700,000 tonnes of hot-rolled steel and 200,000 tonnes of steel plates), MMK ranks second (about 650 tonnes of hot rolled steel).
"Duties can lead to redistribution of volumes and increased competition on the domestic market (which will have a negative impact on prices), as well as to changes in the range of products, that is why it is quite difficult to estimate the financial impact," according to the review by Aton.
Analysts said that another metal producer - NLMK, which supplies 120,000 tonnes will apparently suffer the least, and its rolled steel production business in Europe with capacity of 1.7 million tonnes a year in the long run may even take advantage of the situation.
An official with NLMK told TASS that its capacities for production of hot-rolled coil in Belgium amount to 2.2 million tonnes, and so far there are not fully loaded.