The Russian government is considering increasing the export duty for ferrous scrap for six months, Davis Index has learned.
The Ministry of Economic Development of the Russian Federation has recommended establishing an export duty for ferrous scrap at 5pc, but no lower than €45/mt. The decree is yet to be approved by the Government, and some changes to it are still possible. The decree will come to force within 30 days after it is officially signed and published. The current export duty in Russia is 5pc or no lower than €5/mt.
At the beginning of December, the Foundation for Development of Tube Industry applied for an increase in export duty amid a shortage of ferrous scrap in Russia, as Davis Index reported earlier. Higher duty is anticipated to redirect 50pc of ferrous scrap export to the local market, so Russian EAF-based mills will be able to raise capacity utilization rates and keep employment during the pandemic.
Ferrous scrap export from Russia is expected to reach 3.7mn mt in 2020 compared with 3.3mn mt in 2019.
Russian scrap collectors, members of association Ruslom.com, have voiced opposition to any restrictions because they will dent many recyclers’ business. They told Davis Index that export increased in January-November 2020 because of a decline in domestic scrap consumption by 7pc. Negotiations are in progress in Russia, and market participants anticipate the decree to be finalized by the end of this week.