Russian Government considers the adjustment of the slab prices

The proposed change would raise the threshold from 30,000 RUB to 60,000 RUB, according to Deputy Minister of Industry and Trade Mikhail Yurin. 

This proposal stems from a request by the Russian Steel Association (Russkaya Stal), which submitted a formal letter to Minpromtorg in the fall of 2024. The association advocates for either the complete removal of the excise tax on liquid steel or the adjustment of the slab price threshold to reflect current market conditions. Alexander Shevelev, CEO of Severstal, emphasized the importance of revising these measures to reduce the financial burden on steel producers.

The excise tax on liquid steel, introduced in 2022, is set at 2.7% of the average monthly export price for steel slabs on an FOB basis at Russian ports in the Southern Federal District. Yurin stressed that the decision must be carefully evaluated, as it affects all electric steel producers and has wide-reaching implications for the domestic steel industry.

"This is a measure that impacts the entire sector, and we must take a balanced approach," Yurin explained.

Since its implementation, the excise tax has drawn criticism from steel producers, who argue that the fixed threshold of 30,000 RUB per ton no longer reflects current economic realities, particularly with rising production costs and fluctuating global prices. The proposed threshold increase to 60,000 RUB per ton aims to alleviate pressure on the industry while maintaining government revenues.

If approved, the adjustment could provide financial relief to Russia's steel industry, allowing producers to maintain competitiveness in both domestic and international markets. However, the decision is still in the discussion phase, and a consensus among the relevant ministries is required before any changes are implemented.