The Commonwealth of Independent States (CIS) export billet market turned quiet at the end of the week to June 25 following news of the Russian government’s plan to impose temporary export duties on ferrous and non-ferrous metals sold outside the Eurasian Economic Union (EAEU) from August 1, Fastmarkets heard.
Billet is one of the products that will be affected if the government imposes the duties.
The base duty rate will be 15% with a specific minimum tariff for each metal so market participants expect a duty of $115 per tonne on billet, sources said.
“Prices will definitely start rising because there will be an attempt to relay these costs to customers, at least partially,” one Russian producer said.
When asked whether the export duty situation will lead to lower steel billet exports, the Russian producer said that only some of the volume can be reallocated to the domestic market.
A CIS-based trading source said that he expects billet export volumes from Russia to drop if the duty is implemented.
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“But let them impose it first. Russian steelmakers are showing strong resistance to this law,” the CIS trading source added.
Another Russian billet producer also voiced hope that at least part of the costs could be relayed to customers.
“Prices are to rise,” the Russian billet producer said. “We’re receiving a lot more requests for billet today than at the beginning of the week.”
One supplier, however, said that it was out of the market because it had no volumes available until August.
Another Russian mill that spoke to Fastmarkets said that it had no volumes left available but the next offer will be done at a higher level.
A Ukraine-based mill said that the news of the possible export duty in Russia had made them stop offering and take a break to evaluate the situation.
Another Ukrainian mill said that its recent offers were at $640 per tonne fob Black Sea, but the company plans to revise them on Tuesday June 29.
Under such market conditions, no fresh bookings of CIS-origin billet were heard in the second half of the week, sources said.
Fastmarkets’ daily steel billet index, export, fob Black Sea, CIS was calculated at $640 per tonne on June 25, stable day on day
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