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Putin Orders Draft Plan for Metals Exchange

Prime Minister Vladimir Putin has called on regulators to create plans for a national metals exchange by Aug. 1, a move intended to avert price rows between producers and industry, Vedomosti reported Monday.

A source said the plans were already being "seriously studied."

Putin met with regulators from the Federal Anti-Monopoly Service, the Finance Ministry and other bodies last week as part of a drive to curb rising domestic steel prices.

The prime minister also called on the regulators to work out model long-term agreements for metals buyers that would take into account market prices and distribute risk.

Rising prices in the metals sector have become a major issue in Russia. Putin had to intervene to broker a compromise following a serious of complaints from industry about the planned price hikes from steel producers.

The current proposal calls for trade in a range of metal products as well as coal, coking coal and iron ore.

Small quantities of coking coal are already traded on a St. Petersburg-based commodities exchange.

Analysts at VTB were skeptical about the proposal, noting that such commodities are not traded widely on international exchanges and previous calls for a Russian metals bourse have yet to yield significant results.

"An exchange trade of metal products, coal and iron ore is not a globally developed practice and is quite complicated due to the nature of the products," the bank's analysts wrote.

"Therefore, it is not something that could be developed quickly domestically."

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