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FAS warned “RUSAL” and “MMW” to stop abusing dominance on the market of carbon loam
“RUSAL”Trading House is the dominant buyer of fused electrode carbon loam, grades “B1” and “V”, which is the raw material for anode production. “Magnitogorsk Metal Works” OJSC has the dominant position on the carbon lean market together with other producers.
In 2015 the companies did not manage to agree between each other on the main contract condition: the goods price; and “Magnitogorsk Metal Works” complained to FAS accusing “RUSAL” of imposing disadvantageous contract conditions.
Investigating the complaint, FAS confirmed elements of abuse by “RUSAL”; however, FAS also exposed signs of “Magnitogorsk Metal Works” committing a different violation.
Inability to sell carbon loam to another buyer within a short period resulted in emergency discontinuation of carbon loam production at “MMW”. In the course of delays negotiation “RUSAL” switched to foreign producers of raw materials. In view of a critical environmental situation at “MMW” and the risk of putting production of coke chemistry products on halt, the contract was concluded at the “RUSAL” conditions.
Stats-Secretary, Deputy Head of FAS Andrey Tsarikovskiy commented the FAS decision: “Such conduct of technologically related dominant companies – the seller and the buyer – leads to bad consequences for the both. The parties did not manage to agree upon the delivery conditions in a normal negotiation process, which, due to their position could threaten production of aluminum and metallurgical coke in general”.
FAS warned both metallurgical companies to stop the violation. “The companies were issued warnings. Nevertheless, if the situation does not change, antimonopoly measures shall be applied to them”, added Deputy Head of FAS.