Russia steps up efforts to control high metal prices
Russia's government has widened the scope of its efforts to control record-high metals prices through direct political intervention.
Several large steelmakers were yesterday invited to a meeting with industry and trade minister Denis Manturov for discussions focused on securing steel supply for state defence enterprises and construction products under long-term contracts at fixed or formula-based prices with discounts.
The possibility of purchases by the federal agency for state reserves, Rosreserv, was also discussed.
"Steelmakers confirmed their readiness to provide discounts for such contracts," the ministry said after the meeting. "The ministry of industry and trade together with the ministry of construction will work on determining the beneficiaries of such contracts."
The meeting followed comments on 31 May by first deputy prime minister Andrey Belousov that domestic metallurgical companies had "stiffed" the country for around 100bn roubles ($1.36bn) in relation to their pricing policies for public investment and defence industry orders over the past year. Belousov said these companies have to pay this money back to the country's budgets in the form of taxes and tariffs.
Russian anti-monopoly watchdog FAS said yesterday that its regional departments will conduct additional inspections as part of an investigation of the domestic steel market amid a number of complaints this year from steel buyers over inflated prices for rolled products.
And parliament speaker Vyacheslav Volodin said on 31 May that parliament is going to prepare proposals aimed at solving the problem of rising steel prices within a week. "It is unacceptable when domestic prices are rising unreasonably while steel producers retain windfall revenues, perfectly knowing at whose expense," he said.
Steel producers could agree to sales at discounts to state-owned companies to avoid the risk of restrictions on exports, market participants said.
Deputy industry and trade minister Viktor Yevtukhov last week did not rule out the possibility of the government introducing temporary 20-30pc export duties for a range of ferrous and non-ferrous products, following a move to lift duties on ferrous scrap exports to €70/t ($85/t).
In May, the ministry drafted a list of products that could be subject to export duties. As of early last week, that list included semi-finished steel products, flat-rolled steel, refined copper, copper products, scrap and alloys, and aluminium.
The list was sent to the economy ministry for consideration but the ministry said there is a lack of grounds for placing export duties on non-ferrous products and suggested excluding them.
"Russian exports of aluminium and aluminium products, copper wire and wire rod averaged 80-85pc of annual production in 2015-20," the ministry said. "Customs data for 2019-20 and the first quarter of 2021 showed no exports of refined copper alloys, or copper billets for wire production."
Market participants familiar with the situation said that aluminium and copper were subsequently taken out of the industry ministry's potential export duties list late last week, although Argus has so far been unable to verify this.
"To put non-ferrous products on the restricting list was a mistake done by a steel lobby, which has now bumped into a non-ferrous lobby," one trader said. "Shares in some non-ferrous producers also fell after [the deputy prime minister's] comments yesterday. I guess we will see a sort of war of the lobbies in the near future."
While state projects and enterprises are key customers for Russian steel producers, offering them discounted prices is unlikely to cool domestic prices in general — for steel products or scrap.
"Mills will obviously seek to offset losses on state contracts through higher prices for export and non-state domestic business," a scrap market participant said. "If this happens, all this recent ado around the scrap exports duty will turn out to be totally unnecessary and pointless."
By Valery Zavyazkin
Related news posts
Hydro invests in metal recycling plant at Hoyanger
Hydro invests in metal recycling plant at Hoyanger
London, 22 April (Argus) — Norwegian aluminium producer Hydro has invested 240mn kroner ($21.8mn) in a new recycling facility alongside its primary aluminium smelter in Hoyanger, Norway. The recycling plant will process 36,000 t/yr of post-consumer aluminium scrap, as Hydro moves towards its 2030 target of reducing its emissions by 30pc compared with 2018 levels. The new facility will process scrap metal from vehicles, building facades, furniture, packaging and other consumer goods, which will be mixed with primary metal made with renewable hydropower at the Hoyanger plant. Among Hydro's low-carbon aluminium products is the Circal brand of aluminium, which is made with 75pc recycled content, and the Reduxa brand, which is made with renewable energy and generates emissions of less than 4kg CO2/kg aluminium produced. They are key to the company's emission reduction targets and ultimately reaching net zero by 2050. "Recycling is the fastest way to zero. With this new facility, we deliver on our strategy to increase recycling capacity in our efforts to decarbonise our own production processes and make products that the world needs for the green transition," the executive vice-president of Hydro's aluminium metal business, Eivind Kallevik, said. By Jethro Wookey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Baltimore opens third temporary shipping channel
Baltimore opens third temporary shipping channel
New York, 22 April (Argus) — A third temporary shipping channel has opened at the Port of Baltimore to allow more vessel traffic around the collapsed Francis Scott Key Bridge. Located on the northeast side of the main channel, the new passage has a controlling depth of 20-ft, a 300-ft horizontal clearance, and a vertical clearance of 135-ft. When combined with two other temporary channels opened earlier this month the port should be able to handle "... approximately 15 percent of pre-collapse commercial activity," said David O'Connell, the federal on-scene coordinator. The main shipping channel of the Port of Baltimore — a key conduit for US vehicle imports and coal exports — is expected to be reopened by the end of May, the Maryland Port Administration said earlier this month. The bridge collapsed into the water late last month when the 116,851dwt container ship Dali lost power and crashed into one of its support columns. Salvage teams have been working ever since to remove debris from the water and containers from the ship in order to clear the main channel. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
China's Lopal starts first Indonesian LFP battery plant
China's Lopal starts first Indonesian LFP battery plant
Beijing, 22 April (Argus) — Major Chinese lithium iron phosphate (LFP) producer Jiangsu Lopal Tech has launched production at the first phase of its Indonesia-based LFP production plant. The Indonesian plant is the first overseas LFP battery material production project with over 10,000 t/yr capacity that a Chinese company has invested in, Lopal said. Lopal's subsidiary Changzhou Liyuan New Energy Technology started building the first phase of the project in July last year, with a 30,000 t/yr output capacity for LFP battery material. The line started pilot production in March. The plant is located in the Kendal Industrial Park in Indonesia's Central Java province. The whole project has a designed capacity of 120,000 t/yr, with the second phase of 90,000 t/yr likely to start construction in the second half of this year. This project marks a milestone in China's investment in overseas battery feedstock resources, according to market participants. Most Indonesian projects that Chinese firms invest in are for primary materials or intermediates such as lithium salts, graphite, nickel matte, mixed hydroxide precipitate (MHP) and ferro-nickel including nickel pig iron. Lopal has been accelerating its investment in lithium-ion battery material production in the past few years. It is also building a 50,000 t/yr production line for LFP and a 100,000 t/yr plant for iron phosphate in the Shandong Heze Juancheng industrial park, in which another 80,000 t/yr iron phosphate project is located. Changzhou Liyuan on 18 April released its newly-developed 4th generation high compaction LFP cathode material S501, with 2.65g/cm³ of compaction. This has increased the battery's energy density and power load, said the company. LFP has taken up a bigger market share in the power battery market because of its lower manufacturing costs and safer performance. But one of its main disadvantages is shorter driving ranges on electric vehicles because of lower energy density. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
International Graphite gets Western Australia funding
International Graphite gets Western Australia funding
Singapore, 22 April (Argus) — Australia's International Graphite will receive fresh funding of A$6.5mn ($4.2mn) for its graphite project and plans in Western Australia's (WA) Collie from the state government. The Labor party-led government of premier Roger Cook will provide A$4.5mn to support the acceleration of International Graphite's pilot graphite micronising plant in Collie to "full scale", with A$2mn for its battery anode material facility feasibility study, the WA government said on 20 April. International Graphite in February wet commissioned its 200 t/yr graphite micronising plant, having obtained government approval for equipment installation late last year. The facility is a precursor to its planned 4,000 t/yr commercial micronising facility in Collie, which is expected to cost A$12.5mn and could begin construction by mid-2024, the firm said. It plans to build the operations over 18-24 months, the WA government said. The company last year signed an exclusive agreement for a lease related to its Collie graphite battery anode material facility. It is aiming to be the first fully integrated battery anode graphite processing firm in WA. International Graphite owns the Springdale graphite deposit near Hopetoun in WA, the second-largest known graphite deposit in the country. The deposit has a mineral resource estimate of 49.3mn t of 6.5pc total graphitic carbon, according to the firm on 12 September. The Australian federal government last year gave A$4.7mn to International Graphite through its Critical Minerals Development Programme grants. It received the first and second tranche of A$1.7mn and A$1.25mn last year. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more