Russia’s Federal Antimonopoly Service detected that NLMK Group’s entities, namely, Novolipetsk Iron & Steel Works (NLMK) and VIZ Stal, set unreasonably high electric transformer steel prices for Russian customers between August 2009 and December 2010. In fact, steel prices for domestic customers were in some cases 100% higher than those for foreign shipments.

The FAS committee did not find any economic or technological grounds for this price difference and came to the conclusion that such a policy violated Article 10 (part 1, paragraph 1) of the Competition Protection Act.

‘As the global metal goods prices kept going down, the price of electric transformer steel delivered to foreign customers decreased considerably, whereas the steel price imposed on the Russian customers remained relatively stable. This trend was brought about by the fact that the Russian suppliers were forced to decrease their prices for foreign consumers because they had to compete with other, foreign manufacturers. Yet there is no competition on the home market, so the monopolist could afford to keep prices at a relatively high level,’ says head of the FAS Industry & Defense Sector Department Maxim Ovchinnikov.