“EVRAZ NTMK” JSC SETS UNREASONABLY HIGH PRICES FOR RAILWAY WHEELS

13-06-2018 | 09:00

On 24 May 2018, Moscow Arbitration Court dismissed a claim of “EVRAZ” Nizhny Tagil Integrated Metal Works JSC to invalidate FAS decision on an antimonopoly case1.

 

On 24.11.2017 FAS found that EVRAZ (“evraz ntmk” JSC and “EvrazHolding” TK” Ltd.) violated Clause 1 Part 1 Article 10 of the Federal Law “On Protection of Competition”.

 

In 2013-2015 profitability of manufacturing 1058 mm diameter locomotive wheels was unreasonably overrated.

 

The case was opened upon documents and information obtained by FAS in the course of surveying the state of competition on the market of solid-rolled wheels.

 

The EVRAZ Group manufactures a wider range of solid-rolled wheels. The company has the dominant position on the Russian market of manufacturing locomotive wheels, 1058 mm diameter. Shunting locomotives are equipped with such wheels.

 

FAS compared profitability of manufacturing locomotive wheels with profitability of manufacturing the main product of wheel mill – wheels, 957 mm diameter. This product accounts for over 80% of wheel production of EVRAZ Group. Since this is the main size of products, its figures determine economic and technological expedience of the plant performance, as well as the profit level required for production and sales of other wheel-mill, including the level of the “necessary” profit on locomotive wheels.

 

Investigating the case FAS established that in 2013-2015 profitability of manufacturing locomotive wheels, 1058 mm diameter, was 4 and more times higher than profitability set by the company on the competitive market for the main type of products.

 

1. No. 1-10-22/00-05-16 case