Once arisen in tube trade between Ukraine and Russia, controversial points were resolved as introduction of quotas for Ukrainian enterprises. Antidumping investigation is usually started under condition of price disagreement (dumping) on the market or dow

LIVING UPON DEMAND

LIVING UPON DEMAND

Ukraine: steel tube trade in 2000

Once arisen in tube trade between Ukraine and Russia,
controversial points were resolved as introduction of quotas for Ukrainian enterprises.
Antidumping investigation is usually started under condition of price disagreement
(dumping) on the market or downturn in local production, oh which there is no evidence in
the RF.

Editorial board presents expert evaluation of
Ukraine’s steel tube export and import market in 2000.

Vladimir PIKOVSKY, Vitaly GNATUSH, NRIC
DerzhZovnishInform

Ukrainian producers saw the year 2000 as intricate from all
points of view. Manufacturing and trade in Ukrainian tubes were on upturn. At the same
time, quotas on seamless tube export to the EU and antidumping investigation in Russia had
their negative effect on the trade. And if mechanism of trade mode with EU countries has
been defined for the next five years, relations with Russia have only been regulated till
the end of 2001.

When looking at the reality, pressure from Russian
producers on Ukraine as regards steel tube supplies call on fair protests by the Ukrainian
party. Nonetheless, a threat of quota imposition on tube import from Ukraine came true.
Claim by the Russia’s Tube Industry Fund on negative effect of Ukrainian tube imports on
production and trade in Russian-made commodity is far from being true. According to
Russian sources, steel tube output in Russia accounted for 146.4% as compared to 1999.
Utilization of production facilities of tube plants grew from 33% in 1999 to 48% in 2000.
At the same time, local consumption of steel tubes in Russia augmented by 38.4%, whereas
consumption of Russian-made tubes boosted by 41.4% against 1999. Despite a 25% upswing in
tube import, its share in total consumption of the commodity moved down to 20% as compared
to 22% in 1999.

Hence, Russia’s assertions that Ukraine stands in the way
of Russian manufacturers of steel tubes contradict common sense. Ousting of Ukrainian-made
steel tubes from Russian market will not result in notable earnings.

Examining situation in Ukraine, there should be noted that
steel tube production and trade throughout 2000 were generally on upturn.

Export in 2000 totaled 1.2 mln. tons worth USD 517 mln.
Comparison to 1999 reveals a 55% growth in export and currency earnings going up by 67%.

Within total shipments of Ukrainian metal products in 2000,
the share of steel tubes made 4.2%, which contributed 10.7% to total currency inflows. The
respective ratio in 1999 was 3.1% to 8.5%.

Even though steel tube supplies from Ukraine in 2000 had
positive trend, exports in the fourth quarter reported traditional winter decline:
shipments in December lost 49 ths. tons as compared to October.

Export growth in 2000 was fostered by increased supplies of
large-diameter welded tubes (+91%) and seamless tubes (+55%). Shipments from Ukraine in
the period under review comprised seamless tubes (61.8%), large-diameter welded tubes
(20.8%), and welded tubes other (17.4%).

In 2000, steel tube supplies were primarily bound to the
CIS (82% approximately). Seamless tubes accounted for 60.4%, the share of large-diameter
welded tubes made 24.5%, and welded tubes other added 15.0%.

The EU ranks the second with 6.1%. Articles supplied to
this region were seamless tubes (58.2% in total EU-bound export), large-diameter welded
tubes (37.9%), and welded tubes other (3.9%). After quotas (30 ths. tons) and antidumping
duty (38.5%) were imposed on five commodity groups under the CC FER (Commodity
Classification for Foreign Economic Relations) that embraced seamless tubes from Ukraine,
exports of these dropped from 62.9 ths. tons in 1999 to 44.6 ths. tons. At the same time,
though, shipments of large-diameter and other welded tubes went up 2.5 and 1.7 times
respectively. Ultimately, annual supplies of Ukrainian steel tubes to the EU were slightly
different with 76.2 ths. tons in 1999 compared to 76.8 ths. tons in 2000. This suggests
recovery of Ukrainian sellers’ market activity in Europe. One may observe curious trend
here as the number of EU countries buying Ukrainian tubes dropped from 12 to 10, whereas
supplies added 17%.

Asia holds the third ranking in by-region distribution of
Ukrainian export of steel tubes with 4.4%. Upon 2000’ results, the region obtained
seamless tubes, which accounted for weighty 92.6% in total steel tube import from Ukraine,
while welded others and large-diameter welded tubes had the remaining 4.5 and 2.8% shares
respectively.

Ten largest buyers of Ukrainian-made steel tubes in 2000
had the following countries at the top: for seamless tubes – Russia with 65.5% and
Uzbekistan with 4.6%; for large-diameter welded tubes – Russia (60.7%), Uzbekistan
(18.1%), and Turkmenistan – 15.3% (see the table).

The leaders among the top ten Ukrainian exporters were OJSC
Nizhnedneprovsk Tube Rolling Works that accounted for 24.2% in total tube export turnover
and OJSC Khartsyzsk Tube Works (22.9%); while the largest importers were State-owned
UkrGazDobycha of Krasnograd with 23.8% and AkhtyrkaNefteGaz (city of Akhtyrka, Sumy
region) with 12.3% (see the table).

In 2000, Ukraine’s import of steel tubes totaled 30.3
ths. tons of steel tubes worth USD 33.9 mln.

The share of HR seamless tubes made 70.2%, welded tubes
(other) contributed 20.6%, and large-diameter welded tubes added 9.2%. Major supplies of
seamless tubes arrived from Russia (13.3 ths. tons), Austria (5.8 ths. tons), and Japan
(1.2 ths. tons), the three of these summing to 95.4% in total imports. Welded tubes
(other) were imported from Russia (some 2.9 ths. tons), Poland (2.6 ths. tons), as well as
from the Czech Republic (122.8 tons), which totaled 89.9% in supplies of the commodity to
Ukraine. Large-diameter welded tubes came from Russia (1.5 ths. tons). Import geography
was expanding throughout 2000 and finally reached 37 countries. 33 of these supplied
seamless tubes and 28 countries imported welded tubes (other) to Ukraine.

Striking the balance to production, export, and import of
steel tubes in 2000 and comparing the data to 1999’ performance, a conclusion emerges on
positive changes on the market for Ukrainian-made steel tubes.

With export grown by 56%, steel tube supplies to interior
market augmented by 17% as compared to 1999. Average growth rate of steel tube import made
2.1 times against 1999. All of these suggest stagnation period on the interior market of
Ukraine. At the same time, according to the forecast by Kiev’s International Center for
Prospective Research, in 2001 Ukraine should maintain positive trend in development of
national economy (GDP is to grow by 5%), and interior market should obtain weighty
encouragement.

Along with solving problems on development of the interior
market, another burning matter is expansion of the list of buyers of Ukrainian-made steel
tubes. In 2001, major consumers of steel tubes on the interior market were construction
sector with 110 ths. tons, enterprises of ferrous metallurgy – 99.4 ths. tons,
machine-building and metalworking – 86 ths. tons, as well as fuel industry – 58 ths.
tons. And this is in light of industrial consumption of steel tubes making 403.6 ths. tons
in 1996, 373.6 ths. tons in 1997, 266 ths. tons in 1999; and 296.5 ths. tons in 2000.

Data from the Annual Bulletin of Ferrous Metallurgy
Statistics in 1995-98 concerning worldwide import of steel tubes confirm such a
possibility. The top largest countries-importers are only led by Russia, which is the
largest buyer of Ukrainian-made tubes. However, counting on Russia alone lacks common
sense. Thus, an urgent task at presently is thorough examination of steel tube markets in
countries that comprise top twenty importers.

The top largest countries – buyers of Ukrainian steel
tubes in 2000 are as follows:

for seamless tubes:

for large-diameter welded tubes:

The top ten Ukrainian exporters are:

The top ten Ukrainian importers are: