Article

 

Metal sector in CEECs and Russia: a comparative analysis in the european context (p.81-99)

by

Doris Hanzl, The Vienna Institute for International Economic Studies (WIIW) and RECEP

Peter Havlik, The Vienna Institute for International Economic Studies (WIIW) and RECEP

Keywords : Transition economies, metals, Russia, Central and Eastern Europe

JEL classification : F13, F21, L61

Abstract

This paper deals with the situation of the metals sector in Russia and Central Eastern Europe, as well as with their EU trade. In both CEECs and Russia, the metals sector inherited huge production overcapacities from the command economy, which are not viable under the market economy conditions. Russian metals sector focuses mainly on basic metals, whereas CEECs specialize rather on fabricated metal products. Due to more active industrial restructuring during the past decade, basic metals became less important in the CEECs’ economies, whereas in Russia, due to the lack of restructuring, the opposite occurred. In Russia, metals exports to the EU are concentrated on basic precious and non-ferrous metals. In the CEECs, the sector’s exports to the EU come also from fabricated metal products. Russian basic metals exports to the EU grew more dynamically than those of the CEECs, when at the same time fabricated metal products exports to the EU grew faster in the CEECs than in Russia. There is no evidence that the EU would discriminate against basic metals imports from Russia. On the contrary, Russian exporters of basic iron and steel were more successful on the EU market than those from CEECs. The takeover of the “acquis communautaire” would require additional investment, but lead to benefits in the medium and long run.