Russia May Allocate Extra Metal Profits to Budget to Stabilize Prices

The Russian Ministry of Industry and Trade has proposed allocating extra money from domestic metals companies’ sales in order to stabilize prices for metal products used in construction, RBC business daily reported, RT writes.

Russian government officials met with the representatives of the metals industry on Tuesday to discuss the rising prices of construction materials, which is caused by the growing costs of metals. According to RBC sources, Deputy Minister of Industry and Trade Viktor Evtuhov made two proposals to resolve the issue.

One possible solution is to set an indicative price for all the main metals products used in construction, such as rolled steel and scrap metal. As a result, companies selling metals above this price could face additional taxes, and the funds could be used for the maintenance and construction of state property.

An alternative solution is to compensate for rising construction prices with increased tax revenue from metals companies, which are now making more money due to the higher prices of metals. The funds from the higher taxes could be used to compensate for excessive construction costs.

Russian developers expressed concern over rising prices for rolled metal and other products at the end of last year, with many of them saying that prices for some items jumped by 50%. This resulted in increased construction costs for the companies. To alleviate the situation, the government introduced additional export duties for iron and steel scrap, and considered excluding traders from the purchase chain.