Moscow considering actions to constrain metal prices
A recent spike in prices for metal products has pushed Russian businesses, especially construction companies, to appeal to the Kremlin for help. The government is now looking at possible solutions including domestic price regulation.
Russia is considering metal price control measures, as the government is concerned about a sudden price surge after receiving complaints from consumers, reports Kitco. The country’s Ministry of Industry and Trade is going to include some steel products on the list of goods that are regarded as essential for the domestic market in order to have the possibility to control prices by limiting exports. The list is likely to include products such as iron ore, semi-finished iron or steel, rolled steel, copper billets, scrap and waste copper, copper and aluminium wire and unprocessed aluminium. “At the moment, there are no plans to introduce restrictions, but in this way, we could create a mechanism that the government can use if necessary,” commented the ministry on 4 May.
The Russian government has been receiving complaints from consumers of metal products, in particular, from construction companies. Prices for a number of metal products including pipes, steel bars and sheet metal surged significantly at the end of 2020 and the beginning of 2021. Thus, First Deputy Prime Minister Andrei Belousov announced a proposal last week to look into some measures to curb the rise in metal prices. However, he spoke out against any “emergency measures” including the introduction of export duties on steel.
At the same time, Belousov allowed “the possibility of market-based regulations of prices”. The proposals under discussion include direct fixed-price contracts to reduce costs for builders as well as the creation of metal product stocks, which may eventually be used for price interventions. The government will analyse all the proposals within a month. The decision will yet depend on how metals prices continue to trade.
Earlier last month, China also reported rising metal prices as being a concern for local companies. In April, China’s Premier of the State Council Li Keqiang pledged to strengthen market regulation of raw materials in a bid to lighten the burden on businesses, as “surging international commodity prices have brought great pressure on companies’ costs”.