The Severstal steel works and the GAZ automobile producer coordinated prices for rolled metal for the 3rd quarter of 2002 within an agreement on supplying it till the end of 2002, the Severstal press service reported to RBC. The parties coordinated prices for all kinds of rolled metal supplied to the assembly plant by Severstal regarding an increase in prices since July 1, 2002. The volume of supplies was confirmed. At the same time, the volume of some kinds of the supplied metal will grow; for example, cold-rolled metal supplies will increase by 36 percent.
As Severstal head Alexey Mordashov stated at a press conference, the price growth for the metal supplied to GAZ by 18-19 percent is connected with an increase in tariffs for gas and energy. At the same time, the share of rolled metal in the production cost of automobiles does not exceed 8 percent, which could bring about an increase in prices by 2 percent at most. This is why the price growth for rolled metal cannot be the reason for increasing automobile prices and stopping the assembly line. According to Mordashov, Severstal is not interested in GAZ stopping its car production, as it would influence the activities of the Zavolzhsky Engine Plant, a part of the Severstal holding, which supplies engines to GAZ.