FAS INITIATED CASE IN REBAR MARKET

In October 2023, Promsort group of companies (formerly Tulachermet-Steel) increased the price of rebar by 25 %

FAS Russia regularly monitors prices for construction materials. The special attention of the authority is focused at companies that occupy a dominant position.  According to the results of the analysis of the state of competition, the authority found that the groups of companies Promsort, UK Novostal-M, Mechel and EVRAZ occupy a dominant position in the market.

The price monitoring conducted by the authority showed that from August to October 2023, the price increase for rebar was 25 %. In addition, in the markets of other types of metal products, the authority recorded a change in prices within 5 %. At the same time, the cost of the main raw materials for the production of rebar – ferrous scrap and iron ore raw materials was stable throughout August-September 2023 and did not contribute to an increase in prices for rebar.

Besides, the antimonopoly authority received information from the Ministry of Industry and Trade of Russia and the Ministry of Construction of Russia about a sharp increase in prices for fittings. According to them, the Promsort group of companies has increased the price in the domestic market by 20-25 % since October 1, 2023. These data confirmed the results of monitoring by FAS Russia.

Taking into account the above, the price of rebar set by the Promsort group of companies (it includes Promsort LLC, Promsort-Tula LLC, Promsort-Kaluga LLC, NLMK-Ural JSC) exceeds the cost and profits required for its production and sale.

The authority has initiated a case against the group of companies on violation of antimonopoly legislation*. During its consideration, FAS Russia will conduct a detailed analysis of the reasons for the change in the price of fittings, including an analysis of the costs of production and sale of goods.

It should be noted that until now, the information that has appeared in open sources about the reduction of prices for fittings by Promsort LLC has not been received by FAS Russia.

If found guilty, organizations face a turnover fine in accordance with the Administrative Code of the Russian Federation.

The authority will continue the economic analysis of the situation on the rebar market. The dominant companies in the market have been sent requests about the validity of the set prices.  If there are signs of abuse of market power on their part, the issue of initiating cases on violation of antimonopoly legislation will also be considered*.

* On the grounds of violation of Paragraph 1 of Part 1 of Article 10 of the Law on Protection of Competition