The Russian government, today, announced export duties on all steel products at the rate of 15%, but minimum $54 per tonne, effective 1 Aug’21 till 31 Dec’21.
The base duty rate will be 15%, and in addition, a specific part will be established, which is calculated as the minimum rate per tonne of products. The tax will be charged depending on which rate will be higher, said Bloomberg, which also reported on the export tax implementation.
Such a minimum duty for pellets can be $54 per tonne; for flat hot rolled products and rebar, $115/t; for cold rolled products, $133/t; and for stainless steel and ferro alloys, $150/t, it is learnt.
The following duty rates are being offered for non-ferrous metals: Copper, $1,126/t; nickel, $2321/t; and aluminum, $254/t.
The export tax announcement was made by Russia’s Head of Ministry of Economy, Maxim Reshetnikov, who said such a measure was required to tame Russian metal prices, which have risen on the heels of the global metals rally.
He said that over the five months of this year, export prices for ferrous metals have increased by 30% in annual terms and for non-ferrous by 50%. He did not see reason to believe that metal prices will decline by the end of the year.
Russia expects to earn around 110 billion rubles ($1.5 billion) of duties from steelmakers and 50 billion rubles from base-metals producers, Reshetnikov said.
Russia third-largest exporter
Russia is the third-biggest steel exporter. Its total steel exports were at 26.85 million tonnes (mn t) in 2020, in which billets comprised the highest share at 12.98 mn t, followed by finished flats at 10.06 mn t and finished longs at 3.80 mn t, as per SteelMint data. Its largest importer was Taiwan with 4.07 mn t, followed by Taiwan at 2.93 mn t and Kazakhstan with 2.04 mn t. But, the largest exports volume goes to Europe as a whole.
Fig in mn t
Source: SteelMint Research
India impact
Such a tax can be a deterrent for Russian exporters and some export supply cut can be expected. The markets vacated could become potential supply zones for Indian and Vietnam mills, both of which have strong exports focus.
However, a source said: “It is too early to say. The CIS mills were not too active in the Asian markets anyways. Could benefit Mediterranean/European mills.”
The source added that impact on prices will depend on the margin situation in the CIS.
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