The Russian authorities have decided to increase the minimum export duty equivalent for ferrous scrap almost threefold, aiming to restrict overseas sales of the raw material outside of the Eurasian Economic Union (EAEU) which includes Armenia, Belarus and Kazakhstan in addition to Russia and Kyrgyzstan.
A subcommittee of the Russian government has decided to increase the export tax for scrap to a minimum of €290/mt, versus the currently valid €100/mt rate, while the actual rate is still unchanged at five percent. The measure, however, will not be applied to the fixed quota of 810,000-830,000 mt of scrap export sales per year, which will be subject to the previously valid restriction. According to the statistics, in 2021 Russia exported around 3.22 million mt of scrap and the mentioned quota adds up to around 25 percent of that volume. The quota itself will be distributed between the regions of Russia in accordance with special coefficients.
The new measure will come into force from May 1 for a three-month period. According to sources, the government’s decision to increase the duty rate is based on their target to restrict scrap exports and to secure tonnages for the local market and, to be more specific, to regulate price levels locally. “Today, taking into account Turkey’s CFR price, minus the freight, the €100/mt export tax and some port charges, the maximum scrap purchase price for exports is at RUB 36,000 according to the current rate. Local mills’ purchase prices in the central region of Russia are at RUB 25,000-25,500/mt,” a source told SteelOrbis. However, market players note that in scrap exports from Russia suppliers are facing difficulties in finding vessels and in payments due to the international sanctions against Russia.
