25 Jun 2019 16:44

Russian ministries sign off on decision to set quotas on ferrous scrap from July 1 - source

MOSCOW. June 25 (Interfax) - The Russian Economic Development Ministry and Finance Ministry have signed off on a decision to set quotas on ferrous scrap and waste exports for the period July 1-December 31, 2019, a source from the government's financial and economic bloc told Interfax.

The ministries approved a draft protocol, decision of the governmental economic development and integration commission's sub-commission for customs-tariff and non-tariff regulation, according to which scrap and waste (TN VED code 7204) exported to countries that are not members of the Eurasian Economic Union in that period will be subject to quotas.

The same decision instructs the Industry and Trade Ministry to submit draft of the relevant resolution to the government.

An informed source told Interfax on June 13 that an initiative to introduce temporary differentiated regional quotas for exports of ferrous steel scrap and waste between July 1 and December 31 was discussed at a meeting held by Deputy Prime Minister Dmitry Kozak in early June.

Quotas will on average across Russia be set at a level of 60%-70% of historical export volumes. "This is the average indicator. There were varied proposals for different regions," the source said.

At the same time, ferrous steel export quotas will not extend to EAEU countries, including Belarus, which receives around 1 million tonnes of scrap from an overall Russian export figure of 5-5.5 million tonnes annually. "Quotas will in no way affect Belarus. Shipments to that country will continue in current volumes," the source said.

The Pipe Industry Development Foundation said the restrictions on steel scrap exports would help stabilize the pipe industry and contain growth in the cost of producing tubular products. It said scrap metal prices averaged up 52% in 2017-2018 and the average cost of producing OCTG went up 22%, with scrap accounting for 13% of this. The lobby also pointed to a lack of feedstock for electric smelting capacity, which had risen a third from 2020 to 2016, to 26.7 million tonnes from 27.5 million tonnes.