Steel export duty extensions unlikely, says Russian official

The Russian Ministry of Industry and Trade sees no prerequisites for extending export duties on metals into 2022, it confirms to Kallanish.

Russia has temporarily imposed an export duty on steel and some other metals of 15% from 1 August to 31 December, for a minimum rate of $54/tonne for HBI and $115/t for most steel products (see Kallanish passim). This will be valid only for supplies outside the Eurasian Economic Union (EAEU).

Earlier, the country implemented a ferrous scrap export duty increase from €45/t to €70/t ($85/t) until the end of the year.

“Today, I do not see any prerequisites for this [duty extension], because prices in the ferrous and nonferrous metallurgy sector have begun to decline and the market has started to cool down,” says deputy industry minister Viktor Yevtukhov. “There are no prerequisites, but how the economy will develop, we cannot now predict anything, not even how the Covid-19 pandemic will behave. It seems that everything is not bad.”

“For some items, prices on the external market are already lower than ours, but we are always late; for 1.5-2 months a price gap always occurs in the growth of prices and in their reduction,” he adds.

However, unlike non-ferrous and ferrous metallurgy products, prices for ferrous scrap on the Russian market are not falling, the deputy minister observes. “This is due to the significant demand both in the domestic and foreign markets,” he comments. “If we see that the price is growing and there is not enough scrap, then I do not exclude that we can offer a temporary ban for some period.”

Earlier, the Russian Steel Association said the introduction of additional duties on steel and non-ferrous metals carries serious risks for steelmakers (see Kallanish passim). Russian steelmaker MMK estimated it may lose around $150 million due to the export duties. Severstal expects to lose $250m.

The Russian Association of Electrometallurgical Enterprises (AEMP) had asked Russian authorities to postpone the introduction of additional duties, but without success.

As for Russian stainless steel exports, the additional duties will impact only a fraction, since most of them are delivered to EAEU countries, according to national special steel association USSA.

Svetoslav Abrossimov Bulgaria