Russiapicture scrap with you – Newspaper Kommersant No. 53 (7254) of 03/29/2022
Export duties and logistics problems brought down the export of ferrous scrap outside the EAEU to almost zero in 2022. Industry danger fears that restricting shipping in the Black Sea, reducing consumption through the port of St. Petersburg, and cutting off vegetation in Russia by Southern Europe could almost double this year’s scrap, to 17.7 million tons. However, for now, the regulator is raising barriers to scrap export in order to maintain stable prices for it on the foreign market.
The export of ferrous metal scrap from Russia is kept almost to zero. According to the Ruslom.com association, which unites Russian scrap collectors, exports in January 2022 in annual terms fell by 99%, to 3 thousand tons, and in 2022 – by 97%, to 36 thousand tons. Export receipts became a mixed export duty of 5%, but not less than 100 euros per ton, which came into effect from the beginning of the year.
“The limiting duties, the naval blockade by the EU countries and the consumption of Western funding have almost completely stopped the export of timber and froze the work of Russian exporters,” the response to a request from Kommersant says.
There it was noted that the exporters of the broken line with the complete blocking of exports through the Black Sea, as well as almost completely blocked deliveries through the port of St. Petersburg. The association says that South Korea, which is committed after exclusion as an export destination for Russia, is given for a great benefit, because of its unwillingness to buy Russian scrap.
The association predicts that scrap collection in 2022 will be felt in 2022 due to a break in supply chains, a lack of vehicles, domestic consumption and serious barriers to exports.
If in 2021 scrap collection will be 30.1 million tons, then this year it may drop to 17.7-23.3 million tons.
The Ministry of Industry and Trade explains the increase in scrap rates to the current level of saturation of the domestic commodity market. The price of rebar used in construction depends on the purchase price of scrap. From this point of view, the regulator has succeeded, as prices have been stable on the domestic market. According to RA “Rusmet”, the average price per ton of FCA without VAT is currently 26.6 thousand rubles, which differed from the prices that were last year. In export markets, scrap metal has risen in price by 44.1% over the year, to $652 per ton in Turkey.
The Ministry of Industry and Trade intends to increase the offer of the export duty on ferrous scrap to 290 euros per ton, providing for quotas for the export of metals not in demand on the market at the rate of the single customs tariff of the EAEU. Ruslom.com gradually introduced an increased quota to eliminate the risk of a rush export of products, but this option was not considered. The ministry did not respond to Kommersant’s request.
Scrap exports from Russia did indeed drop to zero in the first months of 2022, says Alfa Bank’s Boris Krasnozhenov. According to the expert, in February at the end-beginning of March, a number of additional effects appeared, including the consumption of consumption of export goods, including the sale of foreign bank scrap and the disruption of supply chains. “It can be calculated that the situation with logistics and banks on the export connection can be transformed on the horizon of three to six months. Scrap demand in Turkey and Asia remains sufficient. As for the demand for the industrial market, everything will depend on the situation in the construction industry and the demand for a share from large infrastructure projects,” the analyst believes.