Rusal’s Request for Duty Removal
Russian aluminium giant Rusal, the world’s largest producer outside China, has requested the Russian government to abolish exchange rate export duties for its Taishet and Boguchansk smelters. These smelters account for approximately 10% of Rusal’s output. The request comes in the wake of falling aluminium prices, as reported by the newspaper Kommersant.
Current Export Duty Context
Since October 1, Russia has implemented export duties linked to the ruble exchange rate on a wide range of goods. The rate varies between 4% and 7% when the exchange rate exceeds 80 rubles per dollar. This measure aims to replenish the treasury and protect the domestic market and is set to continue until the end of 2024.
Industry and Trade Ministry’s Response
Viktor Yevtukhov, deputy head of the Ministry of Industry and Trade, confirmed the receipt of Rusal’s appeal. The ministry is currently evaluating the feasibility of such a support measure.
Rusal’s Justification for Duty Removal
Rusal argues that removing the duties will help maintain stability in enterprises and jobs within the industry, especially given the unfavourable market environment. The company highlighted a 40% drop in exchange prices for aluminium compared to the peaks in 2022.
Analysts’ Perspective on Rusal and Export Duties
Several analysts have noted that Rusal would be significantly impacted by export duties. There were reports in October by Interfax, citing a source close to the company’s lender, that Rusal was considering closing unprofitable smelters due to these duties.