Major Russian scrap exporters have sent a letter to Russian deputy prime minister Dmitry Kozak, claiming that 290,500 mt or 29 percent of the country’s scrap quota cannot be used because of mistakes made when the quota was set.
First of all, quotas were distributed between both existing companies and those which have stopped export operations or become bankrupt. 63 companies which are not involved in the export business anymore received quotas, i.e., about 20 percent of the total number of exporters. Moreover, more than 30 companies, which started exporting scrap in 2019, have not received any quotas.
Another factor, which is hurting exporters’ positions, is the quota volume for different companies. Traditionally, the seller ships 3,000-30,000 mt cargoes to the export market, while in the quota system some companies have quotas for just 100-300 mt and so cannot make shipments.
Russia’s scrap export quota is 1.0092 million mt for the period from September 1 to December 31 of the current year. The quota system as a temporary measure will not be extended in 2020, but the Russian government will instead implement a new scrap export scheme via trading exchange from April 1, 2020.
