Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The Russian government is considering an increase in export duty for ferrous scrap from a minimal level of €45/mt to €90/mt, Davis Index has learned.


The Ministry of Industry and Trade of the Russian Federation (Minpromtorg) declared that the current export duty has become inefficient as ferrous scrap exports have started increasing again after prices surged in the global market. 


Exports of the material from Russia to countries, which are not members of the Eurasian Economic Union, decreased by 86pc to 194,000mt in February-April 2021. However, in April they reached 75,400mt versus 24,800mt in the previous month. Minpromtorg also noted that the export duty at present has no negative effect on ferrous scrap collections, which rose by 11pc in Q1 2021. As a result, the Ministry has requested an increase in export duty to a minimum of €90/mt for 180 days.


The Russian government imposed an export duty of 5pc, but no lower than €45/mt for ferrous scrap at the end of 2020, which is valid until July 2021, as Davis Index reported earlier.


Viktor Kovshevny, Head of Russian association NSRO Ruslom.com, told Davis Index that the tightening of export ferrous scrap restrictions is inadmissible because they will not only hurt the country’s recycling business but also continue to reduce the number of scrap exporters. Ferrous scrap exports have already fallen by four times since February this year and an increase in export duty may possibly destroy the market.


​He noted that the current duty was meaningless because it was imposed to stabilize scrap prices in the Russian domestic market and to help the construction industry with rebar supply. However, it failed to realize this aim as rebar production has dropped. Scrap prices in the domestic market rose more than exports due to competition, which makes exports less attractive and possible only in regions, where steelmaking is missing.

Leave a Reply

Your email address will not be published.