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Putin, Sechin to Interrogate Metals Firms on Price Increases

Top government officials will question leading metals firms on price rises amid complaints from oil and car firms that the increases are killing their margins and could put ambitious inflation targets at risk.

Prime Minister Vladimir Putin will meet with metals firms next week, spokesman Dmitry Peskov said, while government and company sources said Deputy Prime Minister Igor Sechin would meet metals companies and car manufacturers Wednesday.

Metals prices are expected to rise by up to 30 percent from June, and the move already has generated complaints from the oil sector about surging pipe prices and carmaker AvtoVAZ about steel prices.

"Carmakers will insist on a softening of metals companies' positions in discussions [on price rises]," a source in the auto industry said.

AvtoVAZ, which was saved from bankruptcy last year, has said that Severstal had halted shipments of rolled steel products to it in a disagreement over price.

Price hikes also bode ill for Russia's fight against inflation — touted by Putin as a key success for the government after annual price growth in 2009 eased to its lowest since the collapse of the Soviet Union.

Although inflation has remained benign so far this year, the Central Bank expects price pressures to pick up in coming months.

The debate spilled into the open earlier this week when the Federal Anti-Monopoly Service announced that it was investigating pricing at steelmaker Evraz Group.

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