29 Mar 2022 19:01

Russia's customs sub-committee approves hiking export duty on scrap to 290 euros/tonne, introducing export quota

MOSCOW. March 29 (Interfax) - Russia's sub-committee on customs and tariff regulation on Monday approved hiking the export duty on ferrous scrap metal to 5%, but at least 290 euros per tonne; and the hike is expected to be valid from May 1 to July 31, RBC wrote, citing sources.

Interfax's industry sources have confirmed the hike in the export duty. The sources also say that a quota of up to 830,000 tonnes is being introduced on exporting scrap metal, for which a duty of 100 euros per tonne would apply, as well as regional ratios.

Interfax reported at the end of last week - referencing a letter that the ministry sent to the Finance and Economic Development ministries, with a copy at the economic ministry's disposal - that one of the proposed measures of the Industry and Trade Ministry to support the country's steel and metals industry is to hike the customs duty rate on exporting ferrous scrap metal to 290 euros per tonne. Meantime, there would also be a quota on exported volumes of scrap metal not in demand on the domestic market at the rate of the Eurasian Economic Union's (EAEU) unified customs tariff.

The national self-regulatory association Ruslom.com, representing more than 300 companies from among the procurement structures of steel plants, independent processors, exporters, and traders, wrote to the Industry and Trade Ministry at the beginning of March, requesting that the ministry cancel the increased rate on exporting ferrous scrap metal. The association forecasts a surplus of scrap metal on the domestic market and a drop in the domestic price by at least 18%-20%, and it noted that exports could support the inflow of foreign currency exchange earnings to the government, as well as support the financial performance of scrap dealers. Ruslom.com drew attention to the drop in sales of scrap metal on both the foreign and domestic markets; the stoppage of financing from many Russian factories, foreign banks, and consumers; the increase of at least three-fold in the cost of logistics costs; as well as the interruption in supply chains.

As previously reported, the Russian government in November 2022 hiked the rate on the customs duty for exporting ferrous scrap metal, and it introduced a 180-day mixed export duty of 5%, but at least 100 euros per tonne versus the previous 70 euros per tonne. The new rate is effective as of January 1, 2022. The government hiked the duty on scrap metal the first time in 2021, amid rising prices for metals, to 5%, but at least 45 euros per tonne, from 5%, but at least 5 euros per tonne.