The Ministry of Industry and Trade of the Russian Federation and metallurgists agreed to set “recommended” prices for metals

The Ministry of Industry and Trade of the Russian Federation and metallurgists have agreed to set marginal prices for metals. This agreement will be of a “recommendatory nature” and will not apply to all enterprises.
An agreement was also reached to limit the margins of dealers, who should reduce prices for the domestic market.

April 18, 2022, the Ministry of Industry and Trade announced that it proposes to decouple prices for metals and raw materials for their production on the domestic market from the US dollar.

“(…) It is necessary to ensure the uninterrupted functioning of the industry by “decoupling” prices for metallurgical products and raw materials from the dollar exchange rate. To this end, the Ministry of Industry and Trade proposes to temporarily set the maximum allowable prices for certain types of mineral resources in the domestic market. This This measure will help prevent a rush increase in prices for the resources themselves, as well as for final products on the domestic market. In addition, this measure will help maintain the pace of implementation of investment projects and the construction of federal and regional facilities,” the ministry said.

The Ministry of Industry and Trade again drew attention to the persistence of high prices for raw materials (iron ore, coking coal), ferrous scrap, and also noted that aluminum and copper products are subject to the influence of exchange rate fluctuations.

Earlier, Deputy Head of the Ministry of Industry and Trade Viktor Yevtukhov said that Russian metallurgists should limit the markup to 25% of the cost of production and renegotiate, if necessary, existing contracts for the current year with all industrial enterprises. At the same time, he noted that if the metallurgists do not provide their proposals for reduced prices and profitability in the near future, the cost of metallurgical products will be set by the government.