EU Starts Ferroalloy Antidumping Investigation.

The European Union has initiated an antidumping investigation of Silicomanganese (SiMn) imports from Ukraine, Kazakhstan and China, responding to a complaint from the European ferroalloys association Euroalliages. Eugene Cherviachenko: AlthoughEU countries are not primary markets for Ukrainian SiMn producers(NFER: Susp, SFER: BUY, ZFER: BUY) the duties threaten to decrease domestic production by 10-15%. However, we believe the growing steel industries of non-EU countries (Russia and Turkey accounted for ~55% of exports in 2005) coupled with the reviving domestic steel sector will be the key drivers for Ukrainian ferroalloys producers in the mid-term. Also, China has announced plans to decrease SiMn output by 25% in the mid-term due to tight raw materials supplies and increased electricity costs. For the same reasons, many European producers decreased their output in the first months of this year. Taking all those factors into account, we believe demand for Ukrainian SiMn producers will be stable in the mid-term.