Russia reinstates 34.22% duty for Interpipe wheels

The Eurasian Economic Commission (EEC) reintroduced
its 34.22% anti-dumping duty on imports of Ukrainian railcar wheels into the
Eurasian Economic Union (EAEU) starting June 2, the kommersant.ru news site
reported the same day, citing anonymous sources.

The EEC is the executive body of the EAEU led by
Russia and uniting five former Soviet countries, including Belarus, Kazakhstan,
Armenia and Kyrgyzstan.

Recall, the EEC hiked this duty in January 2018 to 34.22%
from 4.75% and temporarily suspended it in July 2019
until June 1, 2020.

Interpipe sells around 45% of its railway products to
the CIS region, mainly to Russia and Belarus.

Dmytro Khoroshun: We estimate
the reintroduction of the duty might cut USD 12 mln from the EBITDA of
Interpipe’s railway product segment in 3Q20.

Assuming Interpipe sells 51 kt of railway products in
3Q20, the same as in 4Q19, its railway product segment’s EBITDA might fall to
USD 35 mln in 3Q20, or USD 33 mln less than in 4Q19. The remaining USD 21 mln
of the EBITDA drop from 4Q19 to 3Q20 will be due to the assumed 16% drop in
prices, the same as the drop from 4Q19 to March (the latest available month for railway
product prices for exports from Ukraine that has been reported by the State
Statistics Service).

Although prices could have fallen further during April
and May, the reintroduction of the duty by Russia might support and even boost
these prices inside the EEC, as noted by Kommersant’s sources.