Under the conditions of growing internal demand for
scrap, the imports of this raw material to
Russia continue to rise. For the first four months of 2006 the volume of imported
scrap to
Russia exceeded the level of the same period of the last year by 32.6 percent and amounted to 1 percent of the overall domestic
consumption. About 80 percent of imported
scrap was used in
production of crude steel and steel finished products. The rest was sent to
scrap processing enterprises for re-rolling. In the period from January to March of the current year, the volume of
scrap imported doubled every month. In April the increase in volume of
scrap imported by
Russia was equal to 43.6 percent compared to corresponding period of previous year. The main exporter of
scrap to
Russia for the given period was
Kazakhstan.
The internal
consumption of
scrap rose 15.6 percent year on year to 1.7 million tons in April 2006. Since the beginning of the year, the domestic
consumption of
scrap by the metallurgical enterprises was showing the upward trend, mainly due to the desire of Russian steelmakers to catch up with the last year volumes of
production. However, the volumes of domestic deliveries were only able to exceed the last year level in April and only by 1.3 percent. However, on the background of growing domestic need in
scrap, the volumes of
scrap collected in the country have been showing steady decrease since the beginning of the year. By April, the volume of
scrap collected was by 23.4 percent lower than during the corresponding period of the last year. Most probably, the downward tendency in the
scrap collection would continue in the future, since the
scrap consumption is increasing at the faster rate than the
scrap collection.
As far as
scrap price is concerned, the Russian domestic market is becoming more interrelated with the world market for
scrap, where the different tendencies on the global
scrap market started to affect the Russian market at the higher degree. Thus, although during April, most of the Russian steelmakers were decreasing the procurement price of
scrap, during the last week of May they were forced to raise them. The main reason for such rise is the reorienting of Russian
scrap to the export direction. The secondary reasons for rise in procurement prices for
scrap in the domestic market include general decrease in the domestic
scrap collected volume as well as the rise in the steel
production by domestic steelmakers.
Russian
scrap became dearer for the export directions as well. Thus, since the end of May Russian
scrap became dearer by average $5-20 per ton depending on destination. Hence, on the background of the rising export prices, the volume of
scrap exports continued the downward sloping. However, the general decrease in
Russia's
scrap exports did not affect some countries of European region. In particular, the deliveries of Russian
scrap to
Poland increased by 17.5 percent and that to
Sweden by 2.5 times during the first quarter of 2006 from the same period of 2005. Speaking of
Europe as a whole, its share in total Russian
scrap exports increased to 47.4 percent.
On the other hand, the deliveries to
Turkey, the biggest consumer of Russian
scrap, decreased 47.3 percent year on year in the first quarter of 2006. However, the share of
Turkey in overall Russian
scrap exports rose to 28 percent during the same period.