At the conference organized by Komsomolskaya Pravda, topical problems of exporting ferrous scrap were discussed.
At the conference organized by Komsomolskaya Pravda, topical problems of exporting ferrous scrap were discussed.
Komsomolskaya Pravda organized a conference on the export of secondary ferrous metal at the international forum “Scrap of ferrous and non-ferrous metals-2023”. The industry of handling scrap and waste metals today is a huge technological industry, which today in Russia provides hundreds of thousands of jobs, is the most important source of raw materials for metallurgical plants and, in addition to everything, has an important environmental mission.
However, last year, due to circumstances beyond the control of market participants, turned out to be an openly crisis for the industry. Scrap collection in the country fell by a third, and the export of recyclables decreased by 10 times! The reason for the latter circumstance was both the sanctions policy of unfriendly countries and the sharp increase in export duties. Duties began not to regulate exports, but to prohibit it, due to the fact that world prices for scrap fell, and it became economically inexpedient to export scrap. We can say – well, it’s good, there is no need to take scrap out of the country, let it go to Russian factories. However, scrap consumption fell by a quarter. Therefore, scrap collectors were forced to close and cut jobs, they do not have a bedside table where “the money is” in order to support all the workers in the absence of a workload.
It is worth noting that in the current 2023, the conditions for scrap exporters have already been softened. Participants of the conference discussed how to further interact between the state and business.
Reorientation to the domestic market
The analytics on the export of scrap metal was presented by Ekaterina Beletskaya, Marketing Director, VladVneshService. She noted that by the end of the year, exports had actually fallen to zero.
– The situation is now quite complicated, but there are areas where exports continue to go. These are the Republic of Korea, Türkiye and Belarus,” Beletskaya said.
Dmitry Stechkevich, General Director of Pskovvtormet, noted that over the past two years his company has partially reoriented the supply of scrap metal from export destinations to the domestic market. However, it is impossible to do this completely for various reasons, primarily due to logistical problems.
Pskovvtormet General Director Dmitry Stechkevich supported export price parity.
– I think that scrap collectors should choose from two equivalent prices the direction where it is profitable for them to send. The export price and the price of shipments to Russian factories in export-oriented regions should be equivalent, and the duty should perform a regulatory function, Stechkevich noted.
According to his calculations, today the export duty to perform this function should not exceed 6.5%. “The introduction of duties at the level of 7-10% of death is similar,” he added.
Scrap is needed again
In its turn Andrey Savelyev, Head of the Department for the Development of Ferrous Metallurgy, Pipe Industry and Metal Structures of the Department of Metallurgy and Materials of the Ministry of Industry and Trade of the Russian Federationsaid that the government considers the current (already relaxed from January 1, 2023) export restrictions “the most balanced decision” and proposes to extend them to the second half of 2023.
– This will make it possible to export scrap within the quota at the normal rate of customs duty from export-oriented regions, from which reorientation to the domestic scrap market is logistically difficult, impractical, – emphasized Andrey Saveliev.
He also noted that the existing quota reflects the realities of business.
– Export historically occupied a maximum of 15% of the total volume of scrap collection. Now, out of our six-month quota of 600,000 tons, 362,000 tons have been licensed. Three more months ahead – said representative of the Ministry of Industry and Trade.
Provided detailed industry analytics Chairman of the Ruslom.com Association Viktor Kovshevny. In particular, he drew attention to the restoration of metallurgical production in the country after the failure of the second half of 2022, including due to the military-industrial complex.
– If in December no one needed scrap, now calls are coming from different directions: “Come on!” Scrappers understand that it is necessary to reopen points, there is a demand. The general mood is this: we understand that in 2023, most likely, there will be some bottom, but given the dynamics, production is recovering, the situation is much better than a year ago, – told Bucket. According to the head of the industry association, what is needed is not restrictions, but reasonable regulation of exports, which will suit both scrap collectors and metallurgists. Behind every ton of uncollected scrap, there are out-of-service jobs in the industry. It takes years to restore the scrap collection. Metallurgists benefit from being surrounded by strong scrap collectors. Export is not a goal, but a way to ensure the financial stability of scrap collectors during periods of decline in demand in the domestic market. Developed countries were given as an example, where there are no export restrictions, while prices for the domestic market are lower than in Russia.
We need to reduce administrative pressure
Director of DV-Invest Denis Sarana advocated a reduction in state interference in market relations.
– We need a fair proceeds from the release and sale of our products. We need profitability and long-term rules of the game. A fair market is the best way to balance such a complex economy. Prices for goods and services are signals to market participants. No need to send interference, invent prices yourself. In this case, the system will not work correctly, – noted Sarana.
The founder of MetallTorg-Vostok, Alexei Mitrofanov, drew attention to the punitive bias in regulating the export of secondary ferrous metal from the country.
Alexey Mitrofanov, founder of MetallTorg-Vostok, raised the issue of ship recycling. In his opinion, the permission to export scrap obtained as a result of such disposal outside the quota could be a good support for the industry. In addition, he suggested that the conference participants sign an appeal to the Russian government with the initiative to remove scrap metal from the list of strategic goods. The fact is that in connection with this circumstance, a criminal article on smuggling can be applied to scrap exporters. Moreover, even a technical error of 500 thousand rubles in the declaration can equate the export of scrap to the smuggling of weapons or drugs.
Nikolay Malykh, founder of NordWestScrap also raised the issue of administrative and criminal pressure faced by conscientious entrepreneurs.
The founder of NordWestScrap, Nikolay Malykh, raised the problem of a broad interpretation of customs legislation by supervisory authorities.
– Every three years, we are faced with either a new reading of already existing legal norms, or with a broad interpretation of these legal norms by individual executive authorities. In 2018 – two criminal cases, 50 million rubles were withdrawn from circulation. In three and a half years, full rehabilitation, the return of all funds and compensation from the state budget. The result of the activity is a minus to the federal budget. The same thing is happening now, Malykh said. At the same time, he paid special attention to the fact that this problem leads to a great risk of disrupting the implementation of the state defense order.
In response to this remark, the representative of the Ministry of Industry and Trade of the Russian Federation Andrey Savelyev noted that the government already has a successful experience in dealing with interpretations of customs legislation and promised to continue to deal with this problem.
An open studio of Komsomolskaya Pravda worked at the forum. In the photo (from left to right): presenter Alexei Ivanov, chairman of the Ruslom.com association Viktor Kovshevny and director of the DV-Invest company Denis Sarana.
BY THE WAY
On April 11, the State Duma in the second reading adopted an important law in the field of collection, circulation and sale of ferrous scrap and non-ferrous metal. From July 1, 2024, payment for the delivery of scrap metal will be carried out by bank transfer. It will be possible to pay in cash for scrap only within the limits of 10,000 rubles for ferrous metal scrap and 120,000 for non-ferrous metal waste per individual. The law is aimed at whitewashing the industry of collecting scrap and metal waste.
