RIA Novosti cited Mr. Vladimir Putin, Prime Minister of Russia, as saying that the Russian government would allow the import of 260,000 tons of steel pipes annually from Ukraine duty free.
Mr. Putin said “Today we’ll make a decision which has long been expected by Ukrainian pipe producers. As the government of Ukraine requested, we’ll make a decision on 260,000 tons of Ukrainian pipes which will be sold on the Russian market.”
The decision follows a landmark deal ratified by the parliaments of Ukraine and Russia on extending the lease on a Russian naval base in the Ukrainian port of Sevastopol for 25 years after the current lease expires in 2017 in return for a 30% discount on Russian natural gas for Ukraine.
Russia halted from April 1st the imports of Ukrainian steel pipes duty free over the failure of the two ex-Soviet republics to agree on a quota for the second quarter of 2010.
In February Russian steel pipe producers, accounting for over 70% of the domestic steel pipe market, requested the government halt the duty free imports of pipes from Ukraine starting from the second quarter.
They argued the Russian pipe market had narrowed considerably due to the 2008 global economic crisis and the Ukrainian pipe supplies kept the production capacities of domestic enterprises underutilized.
Ukraine metals industry, a major source of the country budget revenues along with the chemicals sector, views Russia as a vast market for the sale of its products at low prices, something potentially damaging for the Russian steel industry. (RIA Novosti)