Russian Steelmakers Seek Double Hike in Minimum Threshold for Zero Steel Tariffs

Industry Urges Government to Revise Definition of "High-Value Added Steel"

The Russian Metallurgical Union has appealed to the government to double the minimum threshold for zero steel export tariffs to $700 per ton. The request comes amid concerns that the current threshold of $350 per ton is insufficient to protect the industry from global competition. The union argues that the definition of "high-value added steel" needs to be revised to reflect the changing market dynamics.

Global Steel Market Challenges

The global steel industry has been facing significant challenges in recent years, including overcapacity, falling demand, and increased competition from emerging economies. These factors have put pressure on steel prices and profitability. Russian steelmakers are particularly vulnerable to these challenges due to their reliance on exports and the high cost of production.

Zero Tariffs for "High-Value Added Steel"

In 2021, the Russian government introduced zero export tariffs for "high-value added steel" to support the industry. The measure was intended to encourage the production and export of more sophisticated and profitable steel products. However, industry representatives argue that the current threshold of $350 per ton is too low and does not adequately protect against cheap imports.

Arguments for Doubling Threshold

The Metallurgical Union claims that the price of high-value added steel has increased significantly since the introduction of zero tariffs. This, they argue, has eroded the effectiveness of the measure and made it difficult for Russian steelmakers to compete with foreign producers.

The union also points to the fact that many other countries have higher minimum thresholds for zero steel tariffs. For example, the European Union has a threshold of €600 per ton, while China has a threshold of $500 per ton.

Government Response

The Russian government has yet to respond formally to the request from the Metallurgical Union. However, industry sources expect the government to consider the arguments carefully and may be open to revising the minimum threshold for zero steel tariffs.

Conclusion

The Russian steel industry is facing significant challenges, including overcapacity, falling demand, and increased competition. The industry is urging the government to double the minimum threshold for zero steel export tariffs to $700 per ton to protect against cheap imports and support the production of more sophisticated and profitable steel products.