RUSSIAN NICKEL EXPORTS SEEN STAYING HIGH DESPITE TAXES

RUSSIAN NICKEL EXPORTS SEEN STAYING HIGH DESPITE TAXES

Russian nickel exports are likely to remain high in 1992 despite recent shipment disruptions, new export taxes and reports of possible output cutbacks and export reductions, European traders said.

Russia is the world's largest nickel producer and accounts for the most of the former Soviet Union's annual nickel output of 300,000 metric tons. Russia exported about 115,000 tons of the metal in 1991.Traders said that bureaucratic red tape and bottlenecks caused by the unloading of grain shipments at Russian ports had caused disruptions at the beginning of this year. They added that the arrival of 10,000 tons of Russian nickel in Rotterdam last week indicated that the worse was over.

A new export tax on metal shipments also does not appear to have dampened Russia's appetite for exporting material, traders added, acknowledging that export licensing requirements introduced Jan. 1, coupled with a new metal export tax to be paid before ships leave port, would cause delays.

"It is an ongoing mess," a trader said.

Although there has been no confirmation from Moscow, the new export tax for nickel is around 2,000 European Currency Units per ton, traders said. The amount varies according to whether the metal is being sold for hard currency or used in a barter agreement.

There had been some fears that the tax would make exporting metal less attractive to Russian producers, who would then sell on the domestic market instead. Although the tax is new, the "Russians have always paid tax,"

In one form or another, one trader said. Exports are likely to remain at last year's levels - if not rise - because of the apparent collapse of domestic demand in Russia, traders said. With the end of the Cold War, a sizable section of the domestic nickel market has disappeared since the Soviet military industry accounted for 10 to 70 percent of Russian nickel demand.

This, along with the decline in general Russian stainless steel production, means domestic demand for nickel is likely to fall considerably this year. This will more than compensate for any fall in production caused by a lack general investment over the last few years, traders said.

Reports that Russia is to cut exports in order to support metal prices are met by cynicism from traders. Russia's desperate need for hard currency far outweighs any other factors, traders argue.

Indeed, of the 115,000 tons of nickel exported by Russia last year, as much as 20,000 tons came from so called non-standard channels, notably nickel consumers, particularly stainless steel mills, that sold nickel to the West for hard currency. Given the economic conditions in Russia, its nickel exports are "not going to be lower athan 1991 levels," a London trader said.