Russia may implement scrap export quotas

The Russian Industry and Trade ministry is working on a proposal to restrict the export of ferrous scrap. This is to be done by implementing regional quotas, deputy minister Victor Evtuhov is quoted as saying on the fringes of an industry event in Lipetsk last week.

In addition, the ministry is considering moving scrap trade to the Saint-Petersburg mercantile exchange. “There are positive and negatives, and it is work in progress. But one way or another, we shall find a way to keep as much ferrous scrap within the country as steel producers need,” he says.

The work in progress quota proposal is based on the premise that some regions have plentiful scrap procurement resources and very low or no consumption, and these regions could export 100% of their scrap. But regions such as Far Eastern, north-western and central European parts of the country suffer from an outflow of the material due to high demand from steel mills in the area.

Russian Far Eastern scrap-based steel mill Amurstal is one of the steelmakers that had been suffering most from a shortage of scrap supplies. This eventually led to its bankruptcy and acquisition by a scrap procurement company. The mill had been lobbying for scrap export restrictions for many years, some of which have been temporarily implemented and cancelled on competition grounds by the Federal Antimonopoly Service (FAS).

The problem of feedstock supply eventually inspired Amurstal to re-visit the plan to switch to metallised feedstock such as iron ore pellets or nuggets.

Russian exports of ferrous scrap fell -18% in the first quarter of 2019 to 943,500 tonnes. South Korea imports from the Russian Far East took 16% of the total, with the largest importer Turkey taking 40% and Belarus, 26%.