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Russia Likely to Ban Scrap Exports from Black Sea Ports - Reports

Russian government has already imposed the ban on exports of ferrous scrap which will be effective for six months period from 21st July’2018 for the exports activities subjected to 9 Far Eastern ports due to lack of infrastructure. According to customs data maintained with SteelMint, the country is fourth largest scrap exporter after EU-28, US and Japan respectively and supplies around 5-5.5 MnT scrap per year.

As per latest updates received on this, apart from earlier prohibited exports activities from Far eastern ports the country is now actively looking to take similar measures for its export activities subjected to Black Sea ports located in the South Western Russia.

According to sources, the export ban from far eastern ports was imposed in order to help one of the largest enterprises in Russia ‘Amurmetal’ with easier availability of raw materials. Now Russian government’s ministry of Industry and Trade intends to help another large steel producer Abinsk Electrometallurgical Works (AEMZ) with raw materials.

The authorities of Krasnodar region were in continuous discussion with the ministry and they have asked to temporarily limit the scrap exports from Azov and Black Sea ports or either increase export duties and tariffs on scrap in order to limit the scrap exports from Black sea region.

Russian government is strongly willing to increase the domestic use of scrap and limit the exports to overseas markets as the insufficiency of ferrous scrap continues which is used in casting and steel-making purposes in the country.

Impact of the export ban on global scrap market could be considerable and which may lead to rise in global scrap prices in coming days.

According to reports, AEMZ and Novorosmetal, two leading steelmakers located in Black Sea region of Russia consume nearly 2.33 MnT of ferrous scrap per year. In 2017, Russia exported total 4.98 MnT ferrous scrap while imported around 700,000 MT ferrous scrap. Russia mainly exports scrap to Turkey and East Asian countries.

Few of participants believe that export ban has been imposed aiming at improving the situation of large metallurgical enterprises, however, which contradicts the antimonopoly legislation of Russia affecting all other ports based in Far East and Black Sea regions. This could be a serious damage to the entire metallurgical industry and the employment of local people.

Scrap exports surge 47% Y-o-Y during Jan-May’18 - Russia exported 2.15 MnT ferrous scrap during Jan-May’18 as against 1.46 MnT ferrous scrap exports in Jan-Apr’17. Turkey imported highest 1.09 MnT ferrous scrap while Belarus imported 0.39 MnT (stable Y-o-Y) from Russia in Jan-May’18. Followed by other prominent importers like South Korea (0.35 MnT, +6% Y-o-Y), Spain (0.06 MnT, -33% Y-o-Y) and Vietnam (0.03 MnT).

However, the country observed last 25 months’ highest ferrous scrap exports in May on increased activities before implementation of export ban, exporting 611,091 MT ferrous scrap in May’18 as against 474,708 MT ferrous scrap in Apr’18.

Source: Steelmint

Jul 23, 2018 14:36
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