If China Fails to Remove Limits on Imports of Russian Steel, Severstal May Face Financial Difficulties

Severstal's management is hoping that Russian Prime Minister Mikhail Kasyanov's visit to China will bring positive results for Russian metal producers. The company's press service announced yesterday that, during his three-day official visit to China, Kasyanov intends to hold discussions with the Chinese leadership on the question of importing Russian metal products. In particular, Kasyanov hopes to reach agreement on removing import limits on these products.

According to Dmitrii Goroshkov, Severstal's sales director, since the introduction of US restrictions on imports of Russian steel, the Chinese market has become the second largest in terms of sales volume for the Cherepovets-based firm (USD 88 million per year). Only the domestic market is larger. 'If the temporary protective measures become permanent, I cannot rule out the possibility of financial problems for Severstal,' said Goroshkov.

Following the US and the EU, China has introduced temporary quotas for imports of the main types of steel products. An examination of imports of nine types of metallurgical products was begun on May 24

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