Posted on 26 Jun 2019
Russian ferrous scrap exports fell by -15% on-year in April to 468,000 tonnes, while January-April volumes also decreased, by -17% on-year to 1.4 million tonnes.
The decrease comes on the back of deteriorating demand from Turkey, where weak demand for long finished products has led to significant production cuts and lower scrap procurement. Prices of scrap have been under downward pressure since February's 2019-high of $330/tonne cfr Turkey.
Turkey nevertheless remained Russia’s largest scrap buyer, with around 42% or 590,000t imported in the first four months of the year, down almost -30% on year. Belarus imported 24% and South Korea 16% of the total in January-April.
Meanwhile, scrap deliveries to Russian domestic mills increased in the first four months of the year, by 20% on-year to 3.8mt. April shipments rose 21% on-year to 1.34mt. The increase could encourage the restriction of ferrous scrap exports, which will be limited by a quota from 1 July. This is because it is easy to make a connection between lower exports and higher domestic deliveries, a local industry observer says.
Russian scrap exports are currently undergoing a review (see Kallanish 14 June), whereas an export quota is applicable from 1 July. The move of all domestic scrap trading to the Saint-Petersburg mercantile exchange may be implemented from 1 January 2020. The majority of Russian metallurgical companies are against the quotas, but support indexation as a tool of increasing efficiency and transparency.
