| Trade Issue | ||
| Russian cement producers call for 30% import duty - 21 Aug, 2008 | ||
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Interfax reported that Russian Cement industry lobby Soyuztsement has asked the government's foreign trade and customs tariff policy commission to impose a temporary import duty of 30% on cement. Soyuztsement also asked the government to take steps to tighten control over certification of on the domestic market and the quality of imported cement. Mr Viktor Zubkov first Deputy Prime Minister of Russia in a letter to the commission's chairman, the industry group asked the government to protect Russian producers from a steep increase in cement imports from Turkey, China and other countries. The letter states that "The union of cement producers asks the Russian government to consider the issue of introducing temporary customs duties on imported cement in the amount of 30%, providing Russian companies with the profitability needed to implement projects to launch new capacity for a period of 5 to 7 years with subsequent monitoring and possible adjustment." According to the letter the government's decision in December 2007 to temporarily lift import duties on cement has led to a steep increase in imports, the union said. Cement imports surged 19 fold YoY to 4.568 million tonnes in the first half of 2007 and imports' share of the market increased to 15% from just 0.9% a year earlier. Soyuztsement said imports could displace more than 10 million tonnes of Russian cement in 2008, which would lead to a drastic drop in production even though existing domestic production capacity fully meets the needs of the country's construction sector. It said Russia's cement industry is at the mercy of the price policies of importers because it is technologically uncompetitive. The cement industry representatives said "Most Russian plants use energy intensive technology, expending twice as much fuel. Core production equipment is as much as 70% to 80% worn out, with amortization amounting to less than one percent of costs as opposed to the 14% needed for simple replacement." The letter said "Due to the displacement of domestic cement with imports, Russia will not receive more than RUB 10 billion in taxes for budgets at various levels by the end of this year, and another RUB 1.1 billion due to the elimination of the import duty for the period prescribed by the government resolution. The increase in imports will cost Russian cement producers more than RUB 43 billion in lost revenue this year, an amount comparable to the cost of building three state-of-the-art cement plants.” Soyuztsement said the current situation and lack of protective measures from the state have changed relations between cement industry investors and financial institutions and this is reducing investment in new equipment, the development of cement-industry engineering and R&D. The union said "The overall situation with the development of the cement sector and its competitiveness is being exacerbated by the liberalization of prices for energy resources." The letter states in 2006 to 2007 Russia's cement industry had the most favorable conditions for modernization and construction of new plants. It said that "There were plans to increase production by 52.3 million tonnes by 2015, with total investment of RUB 500 billion. The realization of even half of them would make it possible to reach a level of 130 million tonnes per year." | ||
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