The Russian aluminum giant Rusal expects a decrease in aluminum production and exports by "hundreds of thousands of tons" as a result of export duties on metals, which were recently approved by the Russian government.
According to the Russian Kommersant business paper, citing on the company, export duty on aluminum, which will come into effect on August 1, should be canceled.
Roman Andryushin, deputy general director of the company for sales in Russia, the CIS and China comments:
“We believe that there should be no duty. The nature of the duty is not clear. So, if the government's goal was to withdraw excess profits, then in fact the company does not have it: now the price of aluminum is not at its peak, and the average cost of production has increased significantly.
According to analysts, Rusal, which was founded by a well-known Russian businessman Oleg Deripaska, will be the worst hit from the tariffs, while, according to predictions of VTB Capital, the company’s EBITDA may decline by 24%.
The government decided to impose duties in response to the rise in domestic steel prices, which, according to officials, led to an increase in the cost of state construction.
The duties consist of a base rate of 15% and an additional component depending on the type of metal, the depth of processing, etc. The minimum export rate for copper is $1226, nickel - $ 2321, aluminum - $ 254, pellets - $ 54, flat hot-rolled steel - $ 115, cold-rolled steel - $ 133, stainless steel and ferroalloys - $150 per ton.
By: Eugen Gerden