A ton of scrap has fallen to its lowest level since the summer of 2020. The reason for the decline is a significant reduction in electric steelmaking in Russia, for which scrap is the main raw material. To reverse the trend, it is necessary to restore demand for construction products, and there are no prerequisites for this.
Illustrative photo: MetalSpace.
By July 13, the average cost of ferrous scrap on FCA terms (loading onto a railway wagon) was 15.25 thousand rubles per ton, excluding VAT. Depending on the region, prices may vary by 2-4 thousand rubles per ton, according to the data from the Rusmet rating agency, which is referenced by the Kommersant newspaper.
Scrap prices are already below cost, taking into account the costs of scrap collectors for collection, transportation and processing, even if you do not take into account hard-to-recover scrap, for which the cost is more than 21 thousand rubles per ton, says the director of Ruslom.com" Victor Kovshevny.
Moreover, he points out, the problem that the industry is facing today is not only in price: often the payment period is postponed for six to nine months after delivery.
"Therefore, due to lower demand and lower liquidity in the market, the number of scrap-harvesting companies continues to decrease. Even some subsidiaries of metallurgical plants began to look for demand on the side due to the lack of orders from their parent structures," says Viktor Kovshevny.Illustrative photo: infopro54.ru
By the end of 2025, the volume of smelting of electric steel can be expected to be about 18 million tons against 23 million tons in 2024, predicts independent expert Leonid Khazanov. According to him, if the situation does not change for the better in the next two to four months, the drop may be even greater. According to independent expert Maxim Khudalov, the rate of reduction in electric steel production is almost twice as high as the rate of reduction in steel production as a whole. According to the Chermet Corporation, in June, the production of all steel in the Russian Federation decreased by 4.9% year-on—year to 5.7 million tons, and by 5.3% to 34.7 million tons in the first half of 2025.
To restore the value of scrap, demand for steel inside and outside Russia must recover, Mr. Khazanov is confident. Combines and electrometallurgical plants should start increasing purchases of scrap and, accordingly, raise the price, Maxim Khudalov agrees.
"But this requires an increase in demand for construction products, because 90% of the scrap is used for the production of construction products. It is difficult to use scrap for complex metallurgical products due to unsuitable
