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Russian government prepares retaliatory measures against skyrocketing metal prices

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The jump in metal prices at the border of 2020 and 2021 has caused complaints from builders and equipment manufacturers. Growth is also expected in the second quarter: according to MMK CEO Pavel Shilyaev, by 25-30%.

Russian government prepares retaliatory measures against skyrocketing metal prices

Experts of the Ministry of Industry and Trade of the Russian Federation have prepared proposals for short-term and long-term measures to stabilize prices for metal products. The list of measures includes export restrictions and stricter tax laws.

Among other things, it is proposed to introduce barriers to the export of scrap by establishing a customs duty of 90 euros per tonne, export quotas and limiting the list of ports through which export is possible.

Customs duties, according to the documents, can be used to compensate for the increase in the costs of budgetary construction projects due to the increase in the cost of metal products. The experts also proposed to conclude direct contracts between metallurgists, regions and builders. It is proposed to limit transactions at a price below the market price only to budget facilities, strictly ensuring that these supplies do not end up on the black market.

The ministry proposed to cancel the refund of part of the VAT to exporters of low-grade metal products (iron ore, billets, rebar) and scrap until prices stabilize at the 2020 level. It is also proposed to establish indicative prices for the supply of metal products to the domestic market, if exceeded, either part of the profits of metallurgists will be withdrawn, or a higher rate of income tax will be introduced. They also want to use the withdrawn to compensate for the costs of budget construction.

Earlier it was reported that having learned about the upcoming measures, the largest metallurgical companies included in the Russian Steel Association (it includes Evraz, Severstal, Mechel, Novolipetsk Steel, etc.), decided to voluntarily provide discounts on metal for government building projects. The volumes of supplies of metal products will be distributed among the enterprises belonging to the Russian Steel Association, taking into account their capabilities and geographical presence.

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