Scheduled for January 1, 2020, export sales of ferrous and non-ferrous scrap from Russia via a trading exchange may be delayed. A draft resolution which includes changes in the rules for scrap exports has been submitted to the Russian government, said Maria Babikova, industry control deputy head of Russia’s Federal Antimonopoly Service (FAS).
Moreover, the seven largest scrap collectors in Russia have sent a collective letter addressed to the Russian deputy prime minister D.N. Kozak, asking the government not to impose requirements to export scrap only through a trading exchange and to report details of local market scrap transactions to the exchange. “In fact, the proposed mechanism will not achieve the goals for which it was developed, but will only make scrap exports very complicated,” according to the scrap collectors’ statement.
The main arguments against the implementation of the new scheme are problems with the determination of a single price benchmark, absence of infrastructure for an exchange for commodities, a possible increase of competition with foreign companies, and the fact that the scrap is not the usual material for exchange trading as it has different production rules compared to such commodities like iron ore and coking coal.
The new system for scrap exports is to replace current quota regulations, which were implemented starting from September 1.
