Federal Antimonopoly Service of Russia, having found no signs of price fixing, nevertheless proposed an imposition of temporary export duties on billet and rebar, following the restrictions on scrap exports suggested earlier. Kommersent reported that FAS sent a letter to the Ministry of Industry and Trade, suggesting introducing duties for six months, which will apply to the entire production chain from raw materials to finished products. FAS intend to use a scrap export duty as the basis. This duty is going through required approvals now and is expected to take effect in January. If the scrap duty is 15%, not less than USD 49 per tonne, duties for billet and rebar should reach 13%, minimum USD 73 and 12%, minimum USD 78, respectively. With these measures, the FAS want to balance the local longs prices.
FAS said “Since the Russian metallurgical industry is export oriented, producers, when setting prices are considering not only the costs of production but also the export prices for finished products as an alternative. In this regard, there are risks that the introduction of an export duty only on raw materials may not lead to the expected result, a decrease in prices for finished products [in the local market in Russia.”
Earlier, Russian construction firms asked the government to look into soaring rebar prices, up 50% from mid November. Russia's Ministry of Construction and Min-promtorg examined the situation and found no market distorting practices. The FAS also started its own investigation after receiving a complaint. Although the FAS found no violations of the antimonopoly legislation, it proposed duties in order to resolve the issue.
Market players are keenly waiting for an outcome, as the global steel prices may further get boost if duties are implemented