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Russia may limit the export of scrap metal

Russia / Ferrous metallurgy

Russian pipe manufacturers talk about a significant shortage of raw materials and possible losses in production volumes up to 3 million tons.

Russia may limit the export of scrap metal

The Pipe Industry Development Fund (FRTP) asked the Ministry of Economy of the Russian Federation to consider at a meeting of the subcommittee on customs and tariff regulation a proposal for a year to increase the export duty on ferrous scrap from 5% to 15%, but not less than 45 euros per ton, starting from 1 January 2021. Kommersant writes about this with reference to a letter from the fund dated December 3 to the address of Minister Maxim Reshetnikov.

According to FRTP, the scrap deficit has increased due to the pandemic, while since January 2020, the average price of scrap, excluding delivery to factories, has increased by 35%, to 19.5 thousand rubles per ton. If the situation is not changed, manufacturers will refuse orders for the production of 2-3 million tons of metal products in 2021, the fund writes.

According to the fund, the current export duty of 5% does not have a protective effect, but its growth to 15% will redirect half of scrap exports to the domestic market. At the same time, FRTP proposed to establish a quota for duty-free export of scrap from remote regions: Kaliningrad, Kamchatka, Sakhalin, the north of the Krasnoyarsk Territory.

Scrap collectors oppose the restrictions, believing that their goal is to reduce prices, which will only lead to a drop in scrap collection.

According to the expert, the increase in the export duty is a direct violation of obligations under the WTO, therefore, it is waiting for the introduction of temporary restrictions on exports. The rise in prices, says Maxim Khudalov from ACRA, is associated with global dynamics, and “it is not a good idea to fight global market trends using administrative methods.”

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