Since the beginning of the year, steel prices in Russia have fallen by more than a third and rolled back to 2020 levels, the Russian Steel Association confirms to Kallanish.

“Steel prices have fallen by 35% since the beginning of the year, while the costs increased by almost 50%,” Russian Steel Association vice president Andrei Leonov told TASS. “In June, the decline in production of Russian steel companies has already amounted to 20-50% on-year.”

Earlier, Russian deputy finance minister Alexei Sazanov said the cancellation of the excise tax on liquid steel is impossible for now (see Kallanish passim). However, the Ministry of Finance is ready to discuss a tax formula amendment in autumn.

Russian authorities set the excise tax rate on liquid steel from 2022 at 2.7%, and introduced a new level of mineral extraction tax (MET) on iron ore at 4.8% and on coking coal at 1.5%.

The State Duma Committee on Budget and Taxes rejected amendments by a group of deputies suggesting a return to the system of taxation on steelmakers that was in force in 2021. That would mean a reduction of MET and the abolition of excise duty on liquid steel.

Russia’s Ministry of Industry and Trade, and Ministry of Finance had planned to study the cash flow of steel enterprises by the end of June in order to determine the need for support measures. 

Industry minister Denis Manturov explained that steelmakers’ financial results in January-April are not bad compared to figures for 2021, but a negative trend is nevertheless observed "primarily because of the rouble exchange rate”.

He noted earlier that June’s reduction in steel production totalled 25% compared to April due to low demand.

MMK previously said it expected to reduce steel output by 40% in June to 550,000 tonnes (see Kallanish passim). Severstal already confirmed its output dropped by 20-25% last month. NLMK said Russia will reduce this year steel production by more than 11 million tonnes, down by 15% on-year.