Russian carmaker AvtoVAZ has said Severstal, the country’s largest steelmaker, had halted shipments of rolled steel products to its plant in a disagreement over price.
Severstal said it had not broken contractual obligations. “Severstal keeps fulfilling its obligations to AvtoVAZ as stated in the long-term agreement,” a spokesman told Reuters.
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AvtoVAZ spokesman Igor Burenkov said in a statement AvtoVaz had agreed to a 20% increase in price for June only while talks with Severstal went ahead, adding it only has enough metal in storage for several days.
But Severstal and MMK, which supplies 40% of AvtoVAZ’s steel needs, wanted the price to increase by 25% from 1 June and to stay at that level till the end of the year, he said.
In May, Russia’s largest carmakers got letters from steelmakers telling them of a 10-30% price increase from July, managers of several carmakers told Reuters.
Russia’s prime minister, Vladimir Putin, and his deputy, Igor Sechin, received a letter this weekend signed by the leaders of the largest Russian carmakers – AvtoVAZ, Kamaz , GAZ Group and Sollers – said a source at one of the carmakers.
The letter contained a request to “regulate the unjust steelmakers’ demands to raise prices”, the source said.
