The Russian authorities have announced their intention to impose export duty on a wide range of steel products and non-ferrous metals as a measure to curb local price increase. Currently, steel market players are trying to evaluate the possible consequences of the restriction, although no official approval has been announced yet.
According to sources, the imposition of a 15 percent tax for a wide range of carbon steel products is being suggested for the period from August 1 to December 31 this year. The duty would be valid for exports outside the Eurasian Economic Union. In addition, the Russian authorities plan to impose minimal prices, which will vary depending on the product.
Preliminary suggested export measures
|
Product group code |
Suggested measure |
|
7202, 7218, 7219, 7220, 7221, 7222 and 7223 |
15% but not less than $150/mt |
|
7205, 7206, 7209, 7210, 7211, 7212, 7215, 7216, 7217, 7225, 7226, 7228 and 7229 |
15% but not less than $133/mt |
|
7201, 7207, 7208, 7213, 7214, 7224 and 7227 |
15% but not less than $115/mt |
|
7203 |
15% but not less than $54/mt |
|
7403 |
15% but not less than $1,226/mt |
|
7501, 7502 and 7503 |
15% but not less than $2,321/mt |
|
7601 and 7602 |
15% but not less than $254/mt |
According to local media sources, the measure will help regulate domestic steel prices which have been surging this year, following the strong international trend, and have been having a negative effect on core local construction projects in terms of costs. Moreover, within the period in question the country’s budget would be expected to receive around RUB 113-114 billion from duties on carbon steel and up to RUB 50 billion from the restrictions on non-ferrous metals. “The duty introduction is not a punishment for steel mills. It is a part of the protective measures for the local market. We have to protect our domestic consumer from what is going on in the international markets now,” Russian prime minister Mikhail Mishustin said.
Although there has been no official confirmation of the export tax imposition, most of the Russia-based mills consider it to be a done deal. Players are trying to evaluate the possible consequences, while the largest impact is expected in the flats and semis segments, taking into account that Russia is one of the key global exporters of the mentioned products. “Actually in this case the effect does not have to be necessarily negative. The export tax might support prices globally, similar to what we expect regarding China’s export duty which is to be announced sometime soon,” a producer told SteelOrbis. However, others fear that with the export duty Russian mills will lose competitiveness in the global markets and, if the export volumes decrease, the supply situation in certain regions will be again disturbed.
“Despite all these talks, there is nothing certain yet. First, we need to see the official decision and the imposed rates and then evaluate what needs to be done and how the markets will react,” a source said.