Russia considers raising scrap export duty to €100/mt

Friday, 12 November 2021 13:56:01 (GMT+3)   |   Istanbul
       

Russia’s Ministry of Industry and Trade has lately suggested further increasing export duty for ferrous scrap as a measure to secure domestic needs in raw materials while global prices keep rising. The ministry insists that the earlier introduced rise to €70/mt has let it regulate exports, thus stabilizing local rebar prices in the summer period. “Taking into account that the measure has already proven its effectiveness and also since there is another global price increase for scrap seen now, we consider it reasonable to introduce the next stage and to increase the rate to €100/mt,” the ministry said.

Another factor is that there has been some sharp uptrend seen in the domestic rebar market in Russia and the prices have settled at $900-945/mt (RUB 78,000-82,000/mt) ex-works/ex-warehouse. “The new rise in rebar prices has occurred due to traders’ speculative policies. They are buying the volumes, putting in their margins, and then selling at much higher prices,” a ministry representative said. In addition, the ministry said it believes that the traders’ segment of the market needs to be diminished and that the industry should use long-term agreements more. In that case, producers will be in closer touch with end-users and will have the opportunity to adapt their production plans better according to contractors’ needs.

In addition to Russia, Ukraine is also in the process of reconsidering its export scrap policies. In particular, while earlier there was a lot of talk regarding the export ban imposition, now the steel industry representatives are suggesting that the government should increase the rate from the current €58/mt to €200/mt. “It will basically mean the same - it will be almost impossible to export with a margin with such a tax,” a market source told SteelOrbis.


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