EU sanctions will deprive Russian metallurgists of half of the income. In the domestic market, they do not allow them to earn their native state

The European Union introduced the fourth package of sanctions against Russia for hostilities in Ukraine. Assets froze nine companies and 15 people related to the supply of military equipment or to the Russian state media. The restrictions also imposed on the import of luxury items into the country - premium cars, household appliances, precious stones, art objects and much more. It is no less important that Brussels banned directly or indirectly import Russian iron and steel into the EU.

In recent years, Russia has imported a record volume to the EU and was the second largest supplier after Turkey. Representatives of the industry assure that after introducing export restrictions, it will be significantly reduced, and the domestic market will “collapse”. The Ministry of Industry and Trade has already held an urgent meeting and recommended that manufacturers begin to restrain or completely reduce prices for products within the country. The New Gazeta understands how the new EU sanctions will affect Russian metallurgists.

“The main reason for this decision was the complete misunderstanding of what will happen to the metallurgical market in the near future,” a source familiar with the results of the meeting told a new ”. The meeting of the head of the Ministry of Industry and Trade with representatives of companies lasted three hours. According to the interlocutor of Novaya, first Denis Manturov proposed setting maximum prices for raw materials and metallurgical products, but many enterprises said that profitability would be zero. After long discussions, the meeting participants agreed that the state would still not establish strict requirements and regulate manufacturers through regulatory acts. Instead, the ministry will give enterprises recommendations to restrain prices and reduce them “if possible”.

"Metallurgists are the most tolerance, or what?"

The expert who wished to remain anonymous noted that the production in the industry reaches 70 million tons for the year, and consumption in Russia is no more than 40 million. Metallurgy is an export -oriented industry, and about half of the manufactured products could previously consume the Russian market. However, the purchasing power of Russians began to decline.

“For example, we are already closing automobile plants - eight out of 14 Russian car factories have already suspended their activities. And consumption in the domestic market will still decrease significantly, according to our estimates - by 15–20%.

In fact, a reduction in demand in the domestic market occurs. Metal consumption will also begin to decline. The government now forbade the export of metal -consuming industries by its decision - all these cars, containers and the rest. We evaluate a decrease in metal consumption of about 15% - about eight million tons. At the same time, we still have a proposal with a reduction in demand, ”he said.

According to classical economic theory, in such a situation, products for products will decrease on their own. And on raw materials, they will grow, especially if you limit the margin of metallurgical production. According to the expert, the increase in prices for iron ore raw materials and coal will be “frantic interest”.

Russian manufacturers are already selling with a significant discount - 30–40%, that is, prices in the domestic market were already lower than abroad. At the same time, metallurgists need to pay taxes on superpathies, when they already pay excise tax on steel (by recounting for the dollar) and increased tax on mineral mining (personal income tax).

“They are already being removed from us, and they have already been removed“ to support the domestic economy ”, as stated in the entry of these tax short stories.

And now they offer to bend again - it is not very clear whether the metallurgists are the most terpil, or what?

In addition to the oil industry, of course, the most working locomotive is a metallurgy. And instead of throwing coals, they take them all the time. We want to actually take the price for one service “in support of the economy” twice! Once removed, and let's now limit them the margin. And the margin of metallurgical enterprises is not so high, ”the source of“ New ”argues.

“We will probably still save self-smoking, but the volume of production will fall. We will have less money for the implementation of investment projects, including environmental, which are important for Russia. Because metallurgical production is far from the cleanest. Recently, we are constantly investing in the ecology. And within the framework of Covid there were no problems with the devices of the Ivl ( artificial ventilation of the lungs. - Ed. ) , Nor with medical oxygen, because we bought SIZs ( personal protective equipment. - Ed. ) , The most “fashionable” drugs and transmitted presence to charity in our regions. About 10-15 billion rubles all metallurgists spent on supporting medicine in Russia for Covid, ”he says. -

Vladimir Vladimirovich [Putin] said, of course, that the Soviet Union had tremendous successes, but forgot to mention that the USSR fell apart primarily because of the planned economy, to which we are now intensely pushed.

[Need] restoration. International economic relations of Russia with the world economy. ”

"If the priority is the purchase of new armored personnel carriers, it means that the population will suffer"

Andrey Nechaev

Doctor of Economics, Professor, Minister of Economics of the Russian Federation in the Government of E. Gaidar in 1992-1993, Chairman of the Civil Initiative Party

- My rating - Russia will lose about six billion dollars in metallurgy while finding alternative sales markets. It is clear that you will have to make some serious price discounts. Given the current situation, of course, new buyers will dictate their prices. In Europe, on the contrary, prices will increase by about 20% because of this. But this market is closing for Russia.

Sanctions will affect different companies in different ways. Let's say Severstal, which receives about a third of its revenue from European exports, will suffer very much. Experts evaluate that she will lose about four billion dollars somewhere. Metalinvest will suffer greatly, in which more than a third of products went to European markets. Other companies - as Magnitogorsk Plant, NMLK, Evraz - will suffer to a lesser extent. In general, rude, if we evaluate, we have 15% of all exports for the products of metallurgists. Of course, oil and gas are inferior, but nevertheless, the third or fourth position of all Russian exports. About half was in Europe.

Infrastructure projects that are implemented at the expense of state investments, apparently, the state will continue. In private investments there will be a decline, and very serious. There will be a decline in metallurgy products. Another question is - how much the metallurgists will want to compensate for their losses in European markets by raising prices in the Russian market. We have observed this more than once in the past. Accordingly, this will even limit customer capabilities for the purchase of products in the domestic market.

Sanctions will affect ordinary people, firstly, to the extent that companies will have to limit their production: there will be a reduction in jobs. And the second-due to reduction of exports, the budget will not receive money. Accordingly, when a significant part is frozen from the reserve fund of national welfare within the framework of sanctions, in particular in American banks and in European banks, the possibilities of maintaining previous budget expenditures from the Ministry of Finance are declining.

Accordingly, if the budget will stagnate and even contract further - this is a matter of priorities. If the priority is still the purchase of new armored personnel carriers for the Russian Guard, then the population will suffer more. If nevertheless there is a reorientation, some kind of change in budget priorities-they will begin to spend more on healthcare, which in return for the departed Covid would be very logical, on culture, on education-then the population will affect a lesser extent.