MMK has decreased the forecast of demand for its products this year almost 2-fold because of the tax reform.
While seeking money for pre-election promises of president Vladimir Putin, Russian authorities suggested increasing the base rate of added value tax by 2%.
“Last year steel consumption in Russia grew by 6.5%. This year we estimate the growth much lower – at 2%, even though not so long ago we were expecting a 4% increase”, the company economy director Andrey Yeremin said. “Because our legislation changes, in particular, VAT could increase, we believe the steel consumption growth could be slowed down”.
In January-June MMK steel products increased in price by 15% YoY, to $565 per ton. Hot-rolled sheet, the main product of MMK’s, became 20% more expensive – $482 per ton. (Ukrainian metal)