THE OFFICIAL POSITION OF THE FAS RUSSIA ON THE ISSUE OF CUSTOMS DUTIES ON ROLLED METAL: BILLET AND REBAR

28-12-2020 | 13:04

The authority takes a balanced approach and sees the possibility of using the mechanism of duties in export-oriented markets in extreme situations.

When the issue of establishing export customs duties on scrap and waste of ferrous metals was discussing, the FAS Russia was concerned that the proposed measure would not lead to the declared result, namely, to a decrease in prices for the rolled metal, since there is an increase in world prices not only for metallurgical raw materials but also for metal products.

Since the Russian metallurgical industry is export-oriented, metal producers, when setting prices, take into account not only the cost of metal production, but also the export alternative of finished products. Therefore, there are risks that imposing of export duty on raw materials may not lead to the expected result, namely, to a decrease in prices for finished metal products.

Previously, the FAS Russia also analyzed the situation on the scrap market and concluded that the situation in Russia is not fundamentally different from the world, as well as from the situation at higher processing stages of metallurgical production. In this situation, the  FAS Russia believes that introduction of export duties on only one of the stages of metallurgical production may lead to a redistribution of profits from scrap procurement to metallurgical plants, and will not fundamentally affect prices for rebar and other rolled products on the domestic market.

Thus, it is necessary to consider the issue comprehensively. As an example, in the case of the introduction of duties on raw materials to stabilize prices, the possibility of introducing a system of export duties on final products was suggested to be considered.

While specific decisions on duties on certain goods, including the size of rates, require a comprehensive study by the responsible executive bodies in due cource.

Currently, the FAS Russia is monitoring the rise in prices on the metal products market, including rebar. The authority is investigating to establish the reasonableness of such prices.



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