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. Last Updated: 07/27/2016

State Vows to Defend Ailing Metals Sector

The government will introduce duties on steel imports and abolish export duties to support domestic producers who have faced anti-dumping measures from abroad, as part of a plan for the ailing metals industry announced Thursday.

"We need to be tougher on imports ... as we often see unfair competition," Industry, Science and Technology Minister Ilya Klebanov said.

Prime Minister Mikhail Kasyanov said Russia's metals production had suffered from anti-dumping measures against Russian steel exports. The United States imposed sanctions on foreign steel in March in a move that angered Russia's steel makers and heightened tensions ahead of a presidential summit next week.

Russia currently exports about 80 percent of its steel and relies on its metals industry for 8 percent of gross domestic product and 16 percent of total industrial production.

As a short-term measure, Russia will abolish steel export duties shortly and introduce import duties for foreign steel, Klebanov said. Russian steel producers have been lobbying the government to introduce high import duties against steel from Ukraine and Kazakhstan.

Kasyanov has instructed the Economic Development and Trade Ministry to expedite anti-dumping investigations into steel imports to Russia, Klebanov said.

He said steel producers have expressed concerns about unfair competition practices of Ukrainian and Kazakh steel producers supplying their products to the Russian market.

Producers have repeatedly urged the government to increase steel import duties to protect the market from cheaper imports from other CIS countries.

In the long term, Russia will restructure the industry, moving away from exports toward encouraging local demand, Klebanov said.

The restructuring will demand widespread layoffs and the closure of inefficient factories, Klebanov said. NTV television estimated job losses as high as 350,000 people.

Russia has about 3,500 metals producing plants employing a total of 1.5 million people. About three-quarters of the plants are the only employers in their respective areas.

The government plan aims for 30 percent growth in the metals industry by 2010. The industry grew 15 percent in 2000, but a year later, nonferrous metals output growth slowed to 5 percent and ferrous metallurgy has seen no growth at all, Kasyanov said.

According to the ministry, ferrous metals rolled stock output is expected to increase to 54 million to 56 million tons by 2010, up 18 percent to 20 percent from 2001.

Aluminum and nickel output is expected to rise to 7 percent to 9 percent in the same period, and copper output is to rise to 10 percent to 14 percent.

The main goal of the plan is to bring the quality and quantity of metals production in Russia in line with domestic and international demand, the ministry said.

Labor productivity in the sector is expected to increase 50 percent in 2010 from 2000. Simultaneously, the number of employees in the sector is seen declining by 100,000 or 7 percent during 2000 to 2005, and by 350,000 by 2010.

(AP, Prime-Tass)