The government of the Russian Federation imposed export duties upon a wide range of steel and non-ferrous exports, including primary aluminium, late last month.
Russian Prime Minister Mikhail Mishustin signed the order to levy export duties upon 340 varieties of metals exports on June 25th. The export duties will go into effect at the first of next month and remain through the end of the year.
The export duty will be 15 percent plus US$254 per metric ton and will apply to primary aluminium. However, aluminium bar, rod, and profiles will not be subject to the levy.
“The introduction of duties will make it possible to mitigate the influence of external conditions on the domestic market, and to adjust prices for metals and metal products,” explained the Russian government upon the measure’s signing.
Not everyone was excited about the prospect of a new export duty, however.
“It will [increase] the Midwest premium because of the lack of metal. Who would pay 10 cents more? If this happens, it’s going to create the biggest imbalance of supply and demand,” opined an unnamed trader to Fastmarkets.
ED&F Man’s head of commodities Edward Meir told the news outlet that the biggest loser in this situation will be the consumer.
“Similar tax proposals are being crafted in both Peru and Chile as well, with all of these having one thing in common — if passed, the taxes will almost certainly be passed on to the consumer in the form of higher premiums or prices, or both.”
The new export duties will not apply to shipments sent to other members of the Eurasian Economic Union, namely Armenia, Belarus, Kazakhstan, and Kyrgyzstan.
Meanwhile, premiums for aluminium billet and primary aluminium continue to set record highs last week.