The situation caused disappointment among industry representatives, considering the proposed measures insufficient. According to Vedomosti newspaper sources, market participants expressed the opinion that the proposed solutions would have only a minor impact on the situation of the metallurgical industry.
According to the draft document, the deadline for payment of excise duty on liquid steel and mineral extraction tax (MET) for iron ore mining is planned to be postponed until December 1 of this year. The representative of the department expressed the hope that this measure would ease the financial situation of companies facing difficulties by providing temporarily available funds. However, earlier the Minister of Industry and Trade Anton Alikhanov noted that such a short-term postponement is an insufficiently effective measure of support.
The Russian Steel Association, which unites major industry players, has proposed much more ambitious steps. Thus, the association appealed to the leadership of the Ministry of Industry and the Ministry of Finance with a proposal to extend the deadline for payment of excise tax and mineral extraction tax until the end of December, as well as to allow the gradual payment of insurance premiums during the first half of next year. Market participants claim that the scheme proposed by the government will give the industry economy only about 700 million rubles in savings, while the average amount of excise tax payments on liquid steel is about 4.6 billion rubles per month.
One of the heads of a large metallurgical company confirmed that the economic impact of the proposed measures is extremely limited. Excise taxes continue to accrue in conditions of falling product prices below the level of production costs, emphasizing that even the most efficiently managed enterprises in the sector suffer losses. Sources believe that truly effective assistance could consist in introducing a temporary ban on excise tax collection and changing the threshold for calculating payments to a more equitable level, since production costs have increased by a quarter or a third since the current tax conditions were established.
Sergey Suverov, an investment strategist at Arikapital Management Company, expressed a similar opinion regarding the limited government assistance, arguing, however, that the restoration of demand from metal consumers should be a fundamental condition for overcoming the crisis. Experts of the publication support the idea of increasing the minimum cost of products for the purposes of calculating excise tax, although Alexey Kalachev, an analyst at Finam Group of companies, doubts that the government will take this step due to an increase in the budget deficit.
It was also reported that many domestic steel producers faced serious problems caused by a drop in domestic demand.
