Russia-based steel producers and scrap exporters have managed to reduce their A3 grade scrap purchase prices quite significantly since the end of June, mainly owing to the mood created by the recently introduced export duties. At the end of last month, the Russian authorities imposed a 15 percent export tax for most steel semis and finished products with each position subject to a minimal $/mt rate, which was set at $115/mt for flats, rebar and semis. At the same time, the government officially approved a scrap export tax increase from €45/mt to €70/mt to come into force starting from July 25 this year.
As a result, scrap purchase prices have moved down by $31-47/mt across Russia over the past two weeks. Moreover, further decreases are anticipated, partly as finished steel prices in Russia are expected to cool off. In the meantime, some large producers are keeping their scrap purchase prices higher than others, aiming to secure needed tonnages.
It is worth mentioning that exporters from the Baltic region specifically seem not to be under much pressure yet. “There is such a thing as an early cargo declaration. Exporters declare the cargo in advance for the contracts with August shipment, which in theory will be subject to the old €45/mt duty,” a source told SteelOrbis.
Region |
Transportation |
Price (RUB/mt) |
Price ($/mt) |
Price change (RUB/mt) |
Price change ($/mt) |
Central |
Railway, FCA |
25,300-26,500 |
340-356 |
-1,600-2,800 |
-31-47 |
Ural |
Railway, FCA |
26,500 |
356 |
-2,100 |
-38 |
Exporters (Baltic region) |
Railway, CPT |
24,000-24,500 |
323-329 |
-2,300-2,800 |
-40-47 |
$1 = RUB 74.4
