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). 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.
At the end of January, Russia tripled the export duty for ferrous scrap to 5pc but no less than €45/t ($55/t) for 180 days, citing a necessity to cool down domestic scrap prices after an unprecedented rally in November 2020 until mid-January. That goal was not achieved because domestic prices remained strong after the duty was boosted .
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.
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.
The country’s ferrous scrap exports collapsed, contracting by more than four times over the raised duty period of February–April — from 796,000t last year to just 194,000t.
