Posted on 27 May 2021
The Russian economic development ministry's regulations sub-committee has recommended to increase the minimum fiscal value of ferrous scrap export duty from the existing €45/tonne to €70/t ($85), Kallanish learns from the ministry. The existing level is set to expire in late July.
The initial recommendation by the ministry was to double the minimum duty level to €90/t. The new suggested level is to be reviewed for the government's final consideration and, if approved, will be applied 30 days after signing.
The minimum fiscal value was increased from €15/t on 29 January for 180 days, as a result of long-standing lobbying by Russian steel – mainly pipe – producers to restrict exports of scrap in order to secure sufficient domestic supply at user-friendly prices.
Since the current duty expires in two months, it is likely the government will want to complete the process in a short time, a market participant says. He adds that he expects it to be a relatively quick process, despite a feasibility study establishing the higher duty's significant effect on all scrap market participants.
Meanwhile, many scrap procurement companies perceive the duty as a prohibitive measure, rather than a restrictive one, and several Turkish scrap buyers tell Kallanish they already see a significant reduction of Russian scrap offer volumes.
Russian scrap arrivals into Turkey in February, whose deals concluded before the duty was increased, were at 141,218 tonnes, down 33.2% on-month but up 8.1% on-year. March arrivals picked up, and at 221,732t were 57% up on-month and 44.3% up on-year, show Turkish Statistical Institute (TUIK) data.
Russian scrap association Ruslom, however, says the country's ferrous scrap exports have shrunk considerably since the higher minimum fiscal value was increased. It says Russian scrap export volumes fell to a quarter during February, March and April, when the higher duty became applicable. This was from 796,000t in the corresponding period of 2020 to just 194,000t this year.
Source:Kallanish
