Hungary PM Signs Decree to Restrict Steel Exports from October
According to a recent ministerial declaration signed by Hungary’s Prime Minister Mr Viktor Orban, the Hungarian government could restrict exports of strategically important raw materials and goods, including steel products from October to help rein in inflation in the sector mandating Hungarian exporters seeking government’s approval to export their products under restrictions of the governmental registration procedure. Hungary's Interior Minister Mr Sandor Pinter will determine whether export of the goods will significantly impede or make impossible the critical establishment, operation, maintenance and development of infrastructures, thereby endangering public supply or risk to security of supply in the construction industry. If export is deemed to threaten the security of supply, the goods must stay within the country.
Hungary will start a registration procedure for companies wishing to export the goods, meaning they will need government approval to sell outside of the country. Shipments can be tracked using the country's electronic trade and transport control system EKAER and police and customs authorities will ensure exporters adhere to the legislation.
Such an export ban would require approval from EU authorities in Brussels, with whom the Hungarian leader has clashed on a range of issues
Any reduction to shipments outside of Hungary could have severe repercussions for the Hungary's domestic steel producer Dunaferr, which is already in crisis because of a lack of investment and constrained working capital. Dunaferr has a 2 million tonne per year capacity but is reported to be operating below 50%.
When implemented, Hungary will oin Russia & Ukraine, which have announced restrictions on steel exports to reduce commodity price inflation by securing domestic supply.