Issue #10-23
06 December 2023
The National Recycling Association RUSLOM.COM continues to publish its regular newsletter for international partners, containing valuable proprietary information on the Russian metals and scrap markets: RUSLOM.COM’s self-regulatory organisation news and updates, the national metal scrap processing and metals industries stories, the latest Rusmet Rating Agency market indices, as well as key macroeconomic agenda. We welcome your feedback and exchange of information.
ASSOCIATION NEWS: ANNOUNCEMENTS AND POST-RELEASES. 3
Association RUSLOM.COM takes part in roundtable on scrap export regulation. 5
RUSSIAN SCRAP PROCESSING INDUSTRY NEWS. 6
Environmental uplift: shipwreck recycling. 7
RUSMET RATING AGENCY INDICES. 8
Solikamsk Magnesium Plant aims to supply Russia with raw materials. 9
Russia’s aluminium market development plan. 10
MACROECONOMIC NEWS OF RUSSIA.. 11
Central Bank of Russia reports significant drop in cash in circulation. 11
Russia’s foreign trade volume reached $530.2 billion in January-September 12
Deficit shrinks, spending grows. 12
ASSOCIATION NEWS: ANNOUNCEMENTS AND POST-RELEASES
In 2024, International Forum “Scrap of Ferrous and Non-Ferrous Metals” and MIR-Expo exhibition will be held at World Trade Centre in Moscow
Participants of this largest scrap industry event in Russia will be offered
- 4 days of business and cultural programme, more than 20 specialised sessions and conferences;
- over 30 market segments to be addressed to (ferrous, non-ferrous and precious scrap, electronic scrap, steel, pig iron, copper, aluminium, lead, tin, zinc, HBI, ore, ferroalloys, rare earth metals, brass, bronze, tinplate, recycling of transport, batteries, tyres and rubber, plastic, glass, paper, class 1-2 waste, etc.);
- over 60 stands, exposition of equipment, services, digital and analytical services,
- more than 75 speakers, leading Russian and international experts, 1000+ market leader participants, target audience only.
As part of the event on 4 March 2024, a general meeting of the National Recycling Association RUSLOM.COM members is scheduled.
Register for the full programme 4-7 March 2024 on the official website www.mir-expo.com
National Recycling Association RUSLOM.COM to prepare proposals for Action Plan to implement Strategy for the Development of Metallurgical Industry of the Russian Federation for the period up to 2030
By order of the Government of the Russian Federation, the Association RUSLOM.COM will prepare proposals for the action plan to implement the Strategy for the Development of the Metallurgical Industry of the Russian Federation for the period up to 2030 in terms of supplying raw materials to metallurgical enterprises, increasing efficiency in the field of managing scrap of ferrous, non-ferrous, rare, rare-earth, and precious metals, as well as recycling of end-of-life vehicles and machinery.
Within the framework of the assignment, the Association will additionally propose mechanisms for the implementation of measures in the sphere of:
- supply of raw materials for metallurgy;
- provision of material and technical base for scrap harvesting and processing;
- -development of transport infrastructure;
- optimisation of tax and tariff burden;
- development of high value-added industries;
- reducing the environmental impact of metallurgy enterprises, including the actualisation of existing measures of state support for the introduction of environmentally friendly, resource-saving and low-carbon technologies;
The Association is already working on the following issues to a high degree of elaboration:
- state support of utilisation of ships, vehicles and equipment out of service;
- increasing administrative responsibility for violation of the rules of managing ferrous and non-ferrous metal scrap;
- introduction of scrap accounting systems;
- regulating the payment of VAT on operations with semi-finished products manufactured using scrap;
- improvement of the procedure for administration of personal income tax for individuals when handing over scrap.
What is happening fully reflects the trend towards continued reform in the scrap market, as well as strengthening the role of professional industry business associations, which is envisaged in the plans of the Russian Government, in particular, with regard to the scrap industry. In 2022, marking 100 years since its creation by a decree of the Soviet government, the scrap and waste metal industry gained an independent status.
Proposals on state support for recycling of ships, vehicles and equipment, used pipes to be developed in Russia
The Ministry of Industry and Trade, the Ministry of Natural Resources, the Ministry of Transport of the Russian Federation and the National Recycling Association RUSLOM.COM will develop proposals on state support for the recycling of ships, vehicles and equipment, used pipes.
This is stated in the Action Plan for the Implementation of the Strategy for the Development of the Metallurgical Industry of the Russian Federation for the Period up to 2030.
The report is to be submitted to the Russian government, the deadline for implementing the measure is 2023-2024.
Experts of Association RUSLOM.COM take part in the XVII Conference of Waste Processing Industry Enterprises “Principles of circular economy formation”.
The event took place on 27 November 2023 at the Chamber of Commerce and Industry of the Russian Federation.
Among the discussed issues are regulatory and legal framework of circular economy; investment activity in the sphere of production and consumption waste management to involve them in the secondary economic turnover; organising and holding the III All-Russian Congress of enterprises engaged in the sphere of production and consumption waste management.
Association RUSLOM.COM takes part in roundtable on scrap export regulation
The National Recycling Association RUSLOM.COM took part in the roundtable meeting “Impact of scrap metal export regulation on the efficiency of scrap procurement and raw materials supply for metallurgy”, organised by the LDPR Faction of the State Duma of the Russian Federation.
The meeting was chaired by Andrey Lugovoy, First Deputy Chairman of the State Duma Committee on Security and Anti-Corruption.
During the event, representatives of the business community and agencies analysed the results of regulation of ferrous scrap exports 2022-2023 and the conditions for extending restrictions. In addition, the prospects of demand from Russian mills for ferrous scrap and the sufficiency of the raw material base were discussed. Special attention was paid to the specifics of scrap procurement and consumption in the regions, as well as to the issues of interaction between exporters and the Federal customs Service of Russia.
RUSSIAN SCRAP PROCESSING INDUSTRY NEWS
Export quotas
The Subcommittee on Customs Tariff and Non-Tariff Regulation, having agreed on the implementation of the allowable rate for scrap exports from 1 December to 30 June 2024, approved a quota of 600 thousand tonnes. This decision, announced by the press service of the Ministry of Economic Development of the Russian Federation, also confirmed the maintenance of the in-quota duty at 5%, but not less than €15 per tonne, as well as the out-of-quota duty, which will remain at 5%, but not less than €290 per tonne.
An important aspect was the distribution of the tariff quota by the Ministry of Industry and Trade. 80% of this quota will be distributed to participants in foreign trade activities according to the historical principle. For this purpose, export data from 1 January to 15 December 2023 will be used, taking into account regional correction factors, including different values for different regions of Russia.
For example, the coefficient for Kamchatka Krai is 2.75, for Krasnoyarsk Krai is 4, for Magadan Oblast is 4, for Sakhalin Oblast – 1.7, for Kaliningrad Oblast – 1.5, for Murmansk Oblast – 1.6. For Arkhangelsk Oblast and Primorsky Krai it is 1, for the subjects of the Northwest Federal District – 0.9, for other subjects of the Russian Federation – 0.1.
The remaining 20% of the tariff quota will be distributed among the participants of the foreign trade activities who have supplied ferrous waste and scrap to systemically important organisations or Russian metallurgical enterprises for the period from July to the end of 2023.
Representatives of the Ministry of Economic Development noted that the extension of these measures will help maintain stable prices and provide strategic raw materials for Russian metallurgical plants.
Environmental uplift: shipwreck recycling
Large-scale shipwreck disposal has become an important event in improving the environment in the waters of the North Kuril District.
Specialists have identified 28 objects to be recycled. The regional budget has earmarked 134 million roubles for this purpose, a quarter of which will be reimbursed from the federal budget.
Work is underway to open a scrap metal collection centre by the end of this year, which will simplify the recycling process.
Last year 4 objects were removed, this year 15. Plans for the rest of the year include the disposal of 26 vessels. The main efforts are concentrated in the Severo-Kurilsk, Korsakov and Nevelsk districts, where most of the recycling takes place. This initiative is being implemented as part of the federal “General Clean-up” project.
RUSMET RATING AGENCY INDICES
The Weekly Rusmet Index for Steel Scrap 3A FCA Russia domestic on 48th week 2023 (27 Nov – 03 Dec) settled at 25,000 RUB/mt (ex VAT). The Index decreased by 700 RUB/mt (-2,7%) compared to previous week.
For 48th week 2023 (27 Nov – 03 Dec) Rusmet Billet Index FOB Black Sea settled at 44,276 RUB/mt (up 1,7%), Rusmet HRC FOB Black Sea Index settled at 52,456 RUB/mt (up 2,0%), Rusmet CRC FOB Black Sea Index settled at 64,014 RUB/mt (up 1,8%), Rusmet Rebar FOB Black Sea Index settled at 44,839 RUB/mt (up 1,5%).
Rusmet Coal FOB Australia (62% CSR) Index compared to previous week increased by $7 (2,6%) to 268$/mt, Index for Coal FOB Australia (70% CSR) compared to previous week increased by $11 (3,5%) and is equal to 325$/mt.
METALLURGY NEWS OF RUSSIA
Ministry of Industry and Trade proposes to adjust the calculation of excise duty on steel by including a deflator coefficient.
The instruction to work on this issue is included in the roadmap of the strategy for the development of the steel industry. However, the Ministry of Finance is opposed to such adjustments, as it believes that they could reduce the amount of budget revenues already planned. In addition, ministries have been instructed to consider the transition to the use of quotations from Russian agencies in the calculation of MET for iron ore.
Currently, one of the indices calculated by the Singapore Exchange – SGX TSI Iron Ore CFR China (62% Fe Fines) – is used for this purpose. The timeframe for the implementation of this mandate is 2026-2030.
In Russia there are agencies that publish iron ore prices – RA Rusmet, Metallplace, MMI, said Viktor Evtukhov, Deputy Minister of Industry and Trade of the Russian Federation.
Solikamsk Magnesium Plant aims to supply Russia with raw materials
The plant’s managers have stressed that their aim is to ensure full import substitution in the country for rare metals and technologically important compounds. This approach will help meet the needs of Russian manufacturers for rare earth metals, supporting high-tech industries such as the production of magnets for wind turbines and electric transportation.
The plant has announced plans for a new separation facility. Neodymium, praseodymium, lanthanum and cerium will be produced in Russia, providing the domestic industry with critical resources. Such measures will play a key role in the recycling of rare metals for the country’s electronics industry.
The Solikamsk Magnesium Plant is the only producer of a number of rare metals in Russia.
Russia’s aluminium market development plan
The Chairman of the Aluminium Association informed the participants of the International Forum “Non-Ferrous Metals of Russia and CIS” about the latest information on the Russian aluminium market and its development prospects. The Forum brought together leading representatives of the non-ferrous metals industry, government agencies, and companies specialising in investment projects and improving the efficiency of companies in the industry.
Russia is the second largest aluminium producer in the world, producing 4 million tonnes of aluminium annually, of which 1 million tonnes is consumed by the domestic market. However, the Association’s strategic goals are to increase domestic aluminium consumption to 1.5 million tonnes by 2030. To achieve this goal, it is necessary to actively develop high-tech industries in various sectors of the economy that use aluminium.
The Aluminium Association, together with its partners, is implementing a number of projects aimed at developing aluminium consumption in the automotive, construction, energy, engineering and other industries. These include localisation of production of casted components for cars, aluminium wheels, development of road infrastructure, production of aluminium consumer goods and many other initiatives.
The development of road infrastructure is also becoming an important area. To date, 63 bridges are at various stages of completion, including unique projects such as bridge kits, bridges over railway crossings and the country’s first aluminium road bridge, which will be completed this year.
The Action Plan adopted by the Government of the Russian Federation at the initiative of the Association aims to stimulate demand for aluminium products by 2025 with a view to 2030.
New opportunities for USM
Russian President Vladimir Putin has approved transactions with shares constituting the authorised capital of USM Holding Company, according to an order issued by the head of state.
USM, which owns assets in metallurgy, mining, telecommunications, and financial services, has been authorised to deal with shares constituting the authorised capital. The company controls assets such as Metalloinvest, Udokan Copper and Ackermann Cement.
Earlier, the court fully satisfied the demand of the company’s shareholders to exclude foreign shareholders from the company.
MACROECONOMIC NEWS OF RUSSIA
Central Bank of Russia reports significant drop in cash in circulation
The volume of cash in circulation has been decreasing for the third month. In October the decrease amounted to 150.7 billion roubles, in September – 21.6 billion roubles. In November, the volume of cash in circulation in Russia decreased by 318.2 billion roubles, which was the largest decrease since May 2022.
The trend continues in December.
According to experts, this is due to the growth of the key interest rate and improved conditions for deposits.
In addition, it will be influenced by the fact that in accordance with the Federal Law of 10.07.2023 № 304-FZ from 1 October 2023 individuals can receive only cashless settlements for scrap metal they deliver.
Earlier, RUSLOM.COM Association of NSROs reported that the volume of non-transparent cash transactions in this sector is at least 500 billion roubles per year, and the law will improve the situation.
Russia’s foreign trade volume reached $530.2 billion in January-September
Russia’s foreign trade this year confirms the stability and activity of the country’s economic relations with the world market. According to the Federal Customs Service of Russia, the trade volume in January-September amounted to $530.2 billion. An important point is the trade surplus, which reached $103.6 billion.
Exports play a significant role in these dynamics with a volume of $316.9 billion, while imports are estimated at $213.3 billion.
It is worth highlighting the increase in trade turnover between Belarus and Russia, which recorded a growth of 11% over the reporting period. This is evidence of the continued rapid dynamics of economic relations between the partner countries, which in turn contributes to the development and strengthening of cooperation within regional unions and economic blocs.
Deficit shrinks, spending grows
In the preliminary assessment of the federal budget execution for January-October 2023, the Ministry of Finance announced a reduction in the budget deficit to 1.235 trillion roubles, or 0.7% of the GDP. These data point to a budget surplus of 215 billion roubles in October. Oil and gas revenues for the period reached 1.634 trillion roubles, showing a growth of 120.9% on month.
This growth was driven by the collection of the quarterly Additional Income Tax (AIT) of 593 billion roubles and the absence of fuel damper payments. Although oil and gas revenues fell by 13.2% month on month, over the 10-month period they are 28.7% higher than in 2022 and 21% higher than in 2021.
On the other hand, government expenditure increased by 25.8% on month in October. On a ten-month basis, they are 11.7% higher than last year and 34.2% higher than in 2021.
This information correlates with the analysis of the law on the federal budget for 2023, where a deficit of 2.925 trillion roubles or 2% of the GDP is planned.
CONTACT: Alexey Kondratyev Director, Public Relations National Recycling Association RUSLOM.COM Address: 119180, 11 building 1, 2-y Kazachiy lane, Moscow, Russia Phone/fax: +7 (499) 490-49-28 Mobile: +7 (903) 363-53-93 E-mail: a.kondratiev@ruslom.com