Russia Plans To Impose Import Duty On Large Diameter Pipes.

The Russian Ministry for Economic Development has proposed applying an 8% import duty on large diameter (LD) pipes. The proposal has been sent to respective ministries for their approval. Concorde Capital: Our concerns about the worsening of HRTR’s prospects in the Russian market are starting to materialize. If effected, the duty will harm Khartsyzk Tube’s (HRTR: SELL) LD pipe sales to Russia and decrease its margins. HRTR’s main Russian competitors are Vyksa Steel Works and Volzhsky, who Pipe previously yielded to HRTR based of price/quality considerations. The duty will make Ukrainian LD pipes produced by HRTR less price competitive relative to Russian peers and HRTR may lose a portion of its Russian market share. The company depends heavily on a single customer, Gazprom, and a possible reduction in orders by the latter will have largely detrimental results for HRTR’s operations.