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. Last Updated: 07/27/2016

U.S. Silicon Metals Call For Sanctions

U.S. silicon metal producers have filed an anti-dumping suit against Russian producers with the U.S. International Trade Commission and Commerce Department, targeting two of Russia's largest metals companies.

The suit targets silicon metal from Russia, which is mainly exported by aluminum majors SUAL Holding and Russian Aluminum, or RusAl. The two companies produced about 71,000 tons of silicon metal in 2001, exporting around 30 percent of it to the United States.

"We are surprised at what happened," SUAL spokesman Alexei Goncharov said. "We have worked on the [U.S.] market for two years and never had any complaints."

SUAL and RusAl have already discussed possible responses to the suit with the Russian government, but the companies declined to say what that response would be.

The U.S. International Trade Commission and Commerce Department have 20 days to review the case -- which was filed Thursday and is the 14th anti-dumping suit against Russia products in the past 10 years -- and decide whether it has merit.

The complainants included silicon metal producer Globe Metallurgical, which filed arguments against granting Russia market status in February together with leading silicon producer Elkem.

The United Steelworkers of America was also among the complainants. The union had pushed for the protective tariffs on steel imports imposed last Thursday.

Russia has called the tariffs discriminatory because it already has bilateral agreements setting quotas and minimum prices for steel from Russia.

U.S. steel companies and unions hailed the decision. The United Steelworkers of America in a statement called the tariff decision a "victory for grassroots activism." Since 1997, 31 steel companies have filed for bankruptcy.

However, U.S. steel consumers, who fear rising prices, attacked the tariffs as economically unfounded. Major steel producers -- including Russia, the European Union and Brazil -- attacked the tariffs as well, calling them protectionist.

The European Union and Brazil have turned to the World Trade Organization, demanding compensation and threatening retribution. Russia has no such recourse, however, because it is not a member of the WTO and its only options are negotiation or retaliation.

Russian steel producers could lose up to $500 million per year and steel production could fall by 2.5 percent in 2002 as a result of the U.S. tariffs, Deputy Economic Development and Trade Minister Maxim Medvedkov said Monday in an interview with Ekho Moskvy radio.

The government may support steel companies by lowering export duties from 5 percent to 3 percent, Medvedkov said. Furthermore, Russia and the European Union signed an agreement last week that would allow Russia to increase exports by 28 percent, from 940,000 tons to 1.2 million tons.

That agreement would make up for volumes not exported to the United States, said Vladimir Titkov, an analyst at Renaissance Capital. Other countries affected by the tariffs may also send supplanted steel to Europe, he said, overloading the market and pushing prices down or prolonging the market's woes.

The quotas on exports to Europe could be increased by a further 12 percent if Russia drops export duties on steel scrap, although scrap exporters thought it unlikely.

"According to our research, it is more cost effective for them to keep scrap prices low than to get the 12 percent increase," said Viktor Makushin, president of the MAIR holding, a leading scrap metal exporter. "It's easier for them to spend money on lobbying instead of increasing productivity."

 RusAl held talks on Monday with Venezualan Energy and Mining Minister Alvaro Silva Calderon on cooperating with state-owned mining and heavy industry holding company Corporacion Venezolana de Guayana in bauxite mining and aluminum production.