The Association of Electrometallurgical Enterprises (AEMP) which includes Abinsk Electric Steel Works, Ashinsky Metallurgical Plant, Balakovo and Amurstal, asked the Prime Minister of Russia to postpone the introduction of duties on metal products until a detailed analysis of the consequences for metallurgists is carried out.
AEMP enterprises pay attention to the lack of the raw material base at electrometallurgical enterprises and because of highly competitive market conditions they work in. The factories also note that more than 50 restrictive measures are already in force on the international markets for Russian metal products, which fact seriously limit the opportunities of domestic exporters.
They also mentioned in the letter that the Russian metal products market is heterogeneous and that many types of products are almost not consumed in Russia. In addition, most electrometallurgical enterprises do not have high-conversion production, or they are located far from sales markets, which makes their operation impossible in unstable export conditions. Notably, the profitability of electrometallurgical enterprises is up to 3 times lower than that of vertically integrated holdings.
The enterprises are convinced that export duties on products carry a serious risk of an explosive increase in prices for the main raw materials – ferrous scrap. The new export duties on finished products will be 1.5 times higher than the planned scrap metal duty of EUR 70.00/ton, which will make the export of raw materials more profitable than that of semi-finished products or rebar. This situation will result in the ferrous scrap being exported and in the shutdown of a number of export-oriented low-conversion industries.