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. Last Updated: 07/27/2016

EU Agrees to Buy More Russian Steel

LONDON -- The European Union plans to boost this year's quota on steel imports from Russia by 8.8 percent as part of an accord that will involve a further increase in 2006.

The EU will set a new 2005 Russian steel quota of 2.22 million metric tons, up from 2.04 million tons fixed last month for the year, and raise the level by 2.5 percent for 2006. The EU provisionally rolled over the 2004 quota while negotiating a longer-term pact with Russia, the world's fourth-biggest steel producing nation.

"It represents a reasonable increase," Gordon Moffat, a director at the Eurofer steel industry group in Brussels, said by telephone. "It protects us from sudden surges in imports and provides the Russians with guaranteed access to the EU market."

European steel demand will probably rise 3.2 percent in the first quarter compared with a year ago, according to Eurofer. Demand for steel grew 3.9 percent last year as economic growth rebounded from the weakest pace in a decade in 2003, when consumption fell 0.4 percent, Eurofer said on its web site.

Luxembourg-based Arcelor, the world's biggest steelmaker, and London-based Corus Group raised prices four times last year.

The quota for Russia allows imports under the bloc's normal steel tariffs, which are zero for the products covered. It covers the "key" flat and long products that represent about half of Russia's total steel exports to the EU, said Moffat. The quota would end should Russia join the World Trade Organization.