Having embarked on the path of stricter regulation of scrap exports in late 2021 in order to balance out supply to domestic producers, the Russian Federation has continued to undertake amendments. This time, the Russian government has decided to cut its quota volumes for exports of ferrous scrap outside of the Eurasian Economic Union (EAEU) which includes Armenia, Belarus and Kazakhstan, in addition to Russia and Kyrgyzstan, to 540,000 mt from 810,000-830,000 mt in the previous round of adjustments. Accordingly, exports within the quota mentioned above will be levied at €100/mt and those above at €290/mt. Nevertheless, according to a statement, the new amendments of export quota are differentiated depending on the regions and taking into account their industrial development. In particular, the mechanism for distributing the tariff quota provides for the possibility of exporting scrap metal which is not required to meet the essential needs of Russian organizations.
The new measure will come into force from June 1 for a two-month period. “That decision was already fully expected one month ago. Nevertheless, given the current export volumes, it will not lead to any visible changes,” a market source commented. According to national association RUSLOM, ex-Russia scrap exports outside the EAEU in 2022 have already dropped significantly. In particular, in the January-April period of the current year they decreased by almost fivefold and amounted to about 200,000 mt, against 962,000 mt for the same period in 2021. Apart from protective restrictions, since March the positions of Russian exporters have additionally been affected by Western sanctions in response to Russia's invasion of Ukraine.