Russia plans to set steel, base metals export duty from August 1
Russia’s economy ministry has proposed that the government impose temporary export duties on ferrous and non-ferrous metals sold outside the Eurasian Economic Union (EAEU), documents seen by Fastmarkets state.
The duty will affect steel products as well as copper, nickel and aluminum.
The change is because global metals prices are increasing, pressuring the domestic market, the country’s minister of economy Maxim Reshetnikov said.
“Over the first five months of 2021 prices for ferrous metals rose by 30% year on year, for non-ferrous by 50%. The growth of global prices results in higher prices domestically so the cost of construction is rising,” the minister said on June 24.
The base duty rate will be 15%, and there will be a specific minimum tariff for each metal.
The minimum rate for pellets may be $54 per tonne, for hot-rolled flat steel products and rebar it may be $115 per tonne, for cold-rolled steel $113 per tonne and for stainless steel and ferroalloys $150 per tonne, Reshetnikov said. For non-ferrous metals the ministry proposed the following rates: Copper - $1126 per tonne, nickel - $2321 per tonne and aluminum - $254 per tonne.
The duties are proposed to be levied between August 1 and December 31, 2021.
Reshetnikov pointed out that the resolutions must be adopted before June 30 because Russian law states that there must be a period of one month between adoption and and the law coming into force.
“The likelihood that the duties will be imposed is close to 100%. And it’s almost impossible to cancel them,” a Russian pig iron producer said.
“With regard to proposed 15% or $115 per tonne duty on pig iron we are likely to halve our output. Therefore, we will have no allocation for export,” the source added.
“There are many deals which will be affected if the duties are imposed - how can customers or mills suddenly absorb 15%?” one trader said.
“Think of all the cargoes that customers have bought, suddenly they have to pay 15% more. I think they may well cancel,” the trader added.