He said Russia has been in talks with metal companies for some time to keep prices below market rates for local customers as the country prepares for a recession that will result in sanctions.
The government has asked steel, nickel and aluminum producers to keep their domestic prices low as part of measures to support the economy under sanctions over Russia's invasion of Ukraine, people have asked not to reveal their identity as the information is inaccurate. Officials have said they want to limit margins to between 20% and 25%.
The Russian Ministry of Industry did not immediately respond to a request for comment on the proposals, while the press services of leading metal producers Severstal, NLMK, Evraz, MMK and Norilsk Nickel declined to comment.
As the Russian economy is reeling from sanctions to punish the Kremlin for invading Ukraine, proposals to rein in prices show a growing sense of urgency. Three weeks into the war, economists expected a sharp contraction this year and inflation soared, prompting authorities to impose capital controls and export restrictions.
Industry Minister Denis Manturov will meet with metal companies to discuss local prices and support for the industry, Tass reported.
The two said the measures will most likely affect the steel industry, where local prices have already fallen by at least 15%. In contrast, steel prices in the European Union rose to all-time highs since the invasion.
Major Russian steelmakers averaged close to 40% Ebitda margin in 2021, while Norilsk Nickel's margin was around 60%.
Many Russian metal companies are already having trouble exporting their wares as some shipments have been halted, with sanctions imposed on many of their billionaire owners. Severstal had suspended its sales to Europe after its owner, Alexey Mordashov, was fined last month. Evraz's largest shareholder Roman Abramovich, Metalloinvest's Alisher Usmanov and Magnitogorsk Iron & Steel Works owner Victor Rashnikov were also targeted by various countries.
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