A Chain Effect

The conflict between Russian metallurgical companies and consumers of rolled steel is growing. On March 25, management of LUKoil, Surgutneftegaz, Rosneft and YUKOS sent a letter to Prime Minister Mikhail Fradkov in which they complained about the 33% increase in prices of pipe stripes and pipes in 2004. The oil companies informed the Prime Minister that due to growth of expenditures on purchases of pipes they will have to increase fuel prices by 20-25%.

Representatives of the oil companies say that the government needs to force the metallurgical companies to lower prices to the level of December 2003 or should fully lift the import duties on pipes and pipe stripes.

This is already the third complaint by oil companies to the government in the last month. Representatives of automotive plants and pipe mills complain about steel makers to government regularly as well.