Russia’s Pipe Industry Development Foundation (FRTP) has proposed a ban on scrap exports starting from May 1, 2019 for six months, according to a letter sent by the FRTP to Russia’s Ministry of Economy. The Ministry of Economy will examine the situation, though no timeframe has been set. The export ban will enable pipe producers to increase their production by 500,000 mt and steel producers to raise their crude steel production by 2 million mt, according to the FRTP. Meanwhile, scrap suppliers have suggested that the export ban should apply only to 10 percent of the total exports, which amounted to 5.24 million mt in 2017.
In a letter to Russia’s Ministry of Transport, Vladislav Vladimirovich Zhukov, managing director of the Sea Port of St. Petersburg, said that the export ban will see Russian suppliers permanently and possibly irrevocably undermined, as they will be replaced in the global market with companies from the United States, China and other countries.
The letter pointed out that Russian scrap exports have been gradually declining as of 2015 due to higher domestic consumption. Mr. Zhukov said that, with this proposal, the pipe industry seeks to increase their own income and forcefully restrict healthy market competition without taking into account the total losses of the Russian economy.
RUSLOM, Russia’s national self-regulating organization of ferrous and non-ferrous scrap and wastes processors and vehicle recyclers, stated that there is no shortage of ferrous scrap in any region of the Russian Federation; on the contrary, there is a surplus. Domestic consumption of ferrous scrap by metallurgical plants in 2018 amounted to 28.5 million mt. Each year more than 45 million mt of scrap and waste of ferrous metals are generated in Russia, RUSLOM indicated.
According to RUSLOM, exports of ferrous scrap amounted to 5.24 million mt in 2017. Moreover, Turkey accounted for 39.8 percent of the total (about 2.08 million mt), and the Republic of Belarus for 26.4 percent (about 1.38 million mt). According to the Turkish Statistics Institute, in 2018 Turkey’s scrap imports from Russia totaled 2.52 million mt.