Russia might hike export duty on ferrous scrap to 5%/at least 25 euros per tonne - paper

MOSCOW. Sept 2 (Interfax) - Russia might raise the export duty on scrap ferrous metals to 5% but at least 25 euros per tonne, national daily Kommersant reported, citing materials for a meeting of the subcommission for increasing the stability of the financial sector and certain sectors of the Russian economy that was held on August 29.

The quota for exports of ferrous metal scrap and waste to countries outside the Eurasian Economic Union (EAEU) is 1.5 million tonnes to the end of the year. The duty is currently 5% but not less than 15 euros per tonne within the quota, and 5% but not less than 290 euros per tonne beyond the quota.

Scrap dealers association Ruslom.com forecast in February that scrap consumption would drop to 12 million-13.8 million tonnes this year from 17.7 million tonnes in 2024.

"The actual drop will be from 4 million to 6 million tonnes, which is a 26-33% drop compared to disastrous 2024. And scrap consumption will fall by almost half compared to 2021," Ruslom.com director Viktor Kovshevny told Interfax. The scale of the drop in scrap demand will depend in large part on the extent of its replacement with substitutes such as HBI and pig iron.

Possible measures to support the industry that were discussed at the subcommission meeting in late August also included the elimination of the excise on liquid steel for electrometallurgical plants and an exemption from the excise for new capacity with investments upward of 50 billion rubles for the duration of the active investment phase and the subsequent three years. Instructions were also issued "to consider the possibility of adjusting the excise" for vertically integrated companies.

The head of steelmaker Severstal, Alexander Shevelev told Interfax this summer that steel companies are proposing to index the cut-off price of 30,000 rubles set in 2022 for calculating the steel excise by accumulated inflation, rather than to fix it.