16 November 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 self-regulatory news and updates; the national metal scrap processing industry stories; the latest Rusmet Rating Agency market indices. As Russia is becoming increasingly internationally oriented and competitive in its foreign trade activities, with a strategic turn towards the Global East and South, we welcome your feedback and communication, based on the above newsletter.
Index
ASSOCIATION NEWS: ANNOUNCEMENTS AND POST-RELEASES. 2
METAL CRUISE business-intensive event held in Moscow.. 5
National Recycling Association RUSLOM.COM takes part in the forum “Made in Russia. 8
NEWS OF THE RUSSIAN SCRAP PROCESSING INDUSTRY.. 10
Russia’s largest environmental project launched. 10
Russia’s Federal Service for Supervision of Natural Resources to operate a register of utilisers. 10
Russian government introduces six-month ban on export of precious metals scrap. 10
RUSMET RATING AGENCY INDICES. 12
ASSOCIATION NEWS: ANNOUNCEMENTS AND POST-RELEASES
Rusmet Rating Agency and National Recycling Association RUSLOM.COM take part in Metal-Expo 2023 exhibition
On 7-10 November 2023, the 29th International Industrial Exhibition Metal-Expo took place in Expocentre in Moscow. Representatives of Rusmet Rating Agency took part in the exhibition, including having their own stand at this prestigious event.
On the first day of the exhibition Victor Kovshevny, Chief Analyst at Rusmet RA and Director of the National Recycling Association RUSLOM.COM, gave a video interview at the stand of the main information partner of the event – the Metal Supply & Sales Magazine. The analyst spoke in detail about the existing issues of scrap collectors and scrap processors, about possible ways of solving these issues.
The speaker noted that one of the key issues today is the reform of personal income tax for individuals who collect scrap. According to him, after the introduction of non-cash settlements for scrap with such individuals, many of them began to be afraid to deliver scrap because of the need to pay personal income tax, so scrap collection from individuals fell by an average of 15-20%.
Another important issue in connection with the adoption of the law on non-cash payments for scrap, he said, is to work with the compliance of banks to establish adequate limits for individuals and eliminate unreasonable account blocking.
Victor Kovshevny also noted that the amount of metal has been growing in Russia since 2000s for all types of metals, while scrap is not collected enough annually – more than twice less than generated. The speaker said that easily accessible scrap is becoming less, but the volume of hard-to-recover scrap is increasing, which requires equipment, a logistics system, and infrastructure to get back into circulation. This is a complex system that requires the scrap industry to team up with metallurgists to create, but it will increase scrap collection and save natural resources.
As part of the most intensive second day of the exhibition’s business programme, representatives of Rusmet RA also took part in a number of events, including a meeting of the Committee for Ferrous Metallurgy and Heavy Engineering of the Russian Engineering Union and a round table discussion on effective management of technological data in metallurgy. The round table dealt with the issues of correct definition of goals for solving business tasks and effective management of business processes on the basis of reliable technological data. The partner of the round table was MMK, which is the foundation for numerous innovative industrial solutions, used by many companies in the industry.
A great interest of the exhibition participants was aroused by the weekly review of the steel products market published by Rusmet, which examines the shipments of rolled products for the week and the dynamics of changes in the prices of products in Russia. The review includes price indices for ferrous scrap, copper scrap, aluminium scrap, lead scrap, mills’ scrap consumption, analysis of rail shipments, market news and other useful information. Visitors had the opportunity to get acquainted with the latest edition of the review and subscribe to it at the Rusmet’s stand.
The participants of Metal-Expo 2023 were very interested in the results of the survey of the business community conducted by Rusmet and the National Recycling Association RUSLOM.COM on the situation on the scrap and metal markets during the transition to cashless settlements for scrap to individuals on the domestic market and changes on the foreign markets.
At the same time, Rusmet presented at the exhibition a new unique handbook in printed and digital versions aimed at helping entrepreneurs operating in the scrap industry. The handbook contains answers to the most common questions related to scrap generation, scrap procurement, and scrap consumption. It received an active and interested response from industry professionals.
The handbook covers core legal and economic aspects, specifics of licensing and fiscal control, trends in standardisation and technical regulation. There are also sections on pricing and price indexation, ferrous and non-ferrous scrap and metal market balances. The publication highlights interesting examples from global industry practice and provides detailed registers of scrap market players by Russian region with ratings of industry leaders.
As part of the third day of Metal-Expo 2023, representatives of Rusmet took part in a round table dedicated to expanding the use of steel in construction as part of the strategic cooperation with the Steel Construction Development Association of Russia and professional associations of the industry.
The issues discussed at the event included the prospects for improving the regulatory framework for the wider use of steel in construction, the development of technical regulations for metal products and structures, and the implementation of the Russian Ministry of Construction’s roadmaps for expanding the use of steel in construction.
During the exhibition the stand of Rusmet Rating Agency was visited by a large number of participants, including members of the National Recycling Association RUSLOM.COM. Among them were Yug-Met, Sacha Corporation, Metallokassa, as well as foreign exhibitors such as MTC Group (India), HuaHong (China) and others.
During the event, Rusmet conducted a series of interviews with exhibitors, including foreign ones, which will be published on the agency’s website.
The Metal-Expo 2023 exhibition included presentations of innovative metallurgical products. In particular, Severstal presented its new development – fire-resistant steel C390P, which has increased fire resistance and allows to reduce the metal intensity of steel structures by up to 20% compared to other steel grades.
Also, at the meeting on the inter-industry work programme to develop new types and improve the quality of steel products for the automotive industry, the results of the fifth such programme, implemented in 2018-2023, were summarised.
As Arkady Tikhonov, Advisor to the General Director of the Bardin Central Research Institute of Ferrous Metals, noted, about 70% of this programme has been implemented. In particular, Russian metallurgical enterprises have mastered the production of high-strength steel, which KAMAZ uses to manufacture the frame and some engine parts and units. Cassette rolling technology has been introduced, which makes it possible to produce batches of sheet products with different properties from a single melt. Progress was made in the production of precision tubes and high-strength fasteners for the automotive industry.
It is also worth mentioning the agreements concluded between foreign and Russian partners. For example, Metalloinvest and Lee Jun (a Chinese manufacturer of mining and metallurgical equipment) signed a cooperation agreement. It is aimed at the production of hot briquetted iron, a key component of green steel.
The Metal-Expo 2023 business programme included more than 50 conferences, seminars and round tables covering all segments of the steel business.
Over 800 exhibitors included leading ferrous and non-ferrous metallurgical companies, engineering companies, manufacturers and suppliers of modern equipment, technologies and innovative solutions for metallurgy and metalworking.
Over 300 exhibitors were foreign companies, the most prominent of which were metallurgical and engineering companies from China, as well as equipment manufacturers from Turkey, India, Iran, Italy, Germany, Kazakhstan and other countries.
The visitors of Metal-Expo 2023 are the main consumers of metal products from the construction industry, engineering, aircraft construction, shipbuilding, fuel and energy complex, transport and logistics, metal processing and metal trading companies.
The active work of Rusmet at Metal-Expo 23 will be naturally continued at the next largest industrial event for scrap metal workers and metallurgists – the MIR-EXPO-24 exhibition and the 19th Forum “Scrap of Ferrous and Non-Ferrous Metals”. These events are organised directly by Rusmet in cooperation with the National Recyling Association RUSLOM.COM.
METAL CRUISE business-intensive event held in Moscow
The METAL CRUISE business-intensive, a river business cruise organised by Rusmet Rating Agency together with the National Recycling Association RUSLOM.COM, took place in Moscow on 24 October and included a seven-hour programme for professionals from the scrap market, metallurgy, and banking.
Topics included cashless payment for scrap, standardisation and control, analysis and technology. A separate session was dedicated to the lead market. The business cruise programme included 20 expert presentations, an interactive survey of delegates, discussions and networking.
The event was opened by Alexander Sorokin, Deputy Head of the Operational Control Department of the Federal Tax Service of Russia, with a presentation on “Specifics of the use of online cash registers in the transition to cashless payments for scrap delivery”.
The speaker talked about the legal requirements in the area of cash register equipment and non-cash settlements for scrap delivery by individuals. He also answered questions from the audience and highlighted the main risks. For example, the survey of participants showed that a quarter of the respondents considered the obligation to issue a cheque to individuals for scrap to be unnecessary after the transition to cashless settlements with individuals for scrap. The expert stated that such an obligation will remain, but the procedure itself can be optimised by means of digitalisation. Alexander Sorokin reported on the procedures for correcting errors and exempting taxpayers from administrative fines. One of the key points was the possibility for taxpayers to voluntarily submit a written request for the correction of an error. An alternative method, according to the speaker, is to write and send a cash correction cheque to the tax authority. He also noted that one of the main conditions is that the tax authority has no information and documents on the administrative offence committed prior to the taxpayer’s application.
The event continued with a presentation by Natalia Belyaeva, CEO of Delphi LLC, who spoke about the procedure for accepting scrap from individuals, including self-employed and individual entrepreneurs (IE), and the specifics of working with scrap processors after 1 October 2023. The speaker also talked about the differences between the self-employed, individuals and individual entrepreneurs, taxes for individuals and personal income taxpayers.
Natalia Belyaeva also noted that the self-employed and individuals can use the only non-cash method of payment when deliver scrap.
The question of how much scrap can be generated by citizens has become one of the most discussed issues. Victor Kovshevny, Director of the National Recycling Association RUSLOM.COM, informed the audience about the amount of scrap generated by individuals. The speaker noted that individuals account for 50.7 percent of those who deliver scrap, and the main categories of scrap are household scrap metal and cars.
According to the speaker, individuals collecting scrap increase the efficiency indicator of the national recycling system and the share of “old scrap” in the total volume of scrap. At the same time, the efficiency of scrap collection in Russia in 2022 was two times lower than in developed countries.
Valery Abyzov, Executive Secretary of the Standards, Science, and Education Committee of the Association RUSLOM.COM, highlighted the current issues of standardisation in the field of scrap metal handling and amendments to the Government Resolution 980 on control (supervision).
Marina Uglovskaya, Executive Director of RUSLOM.COM Association, told the audience about the prevention of barriers and accounts blocks when working with banks and the need to unify banks’ approaches to the scrap industry in order to facilitate the transition to cashless settlements.
The next part of METAL CRUISE’s programme was the “Advice for a Million” blitz for banks, where specialists and representatives of financial institutions spoke. The topics of their speeches were: five reasons to work with a particular bank or service; five tips on how to avoid risks when switching to cashless payments; five “harmful” tips on how to create risks when switching to cashless payments.
Among the speakers were: Maxim Zhurav, Managing Director of Gazprombank; Sergey Mokryshev, Senior Vice President, Head of Customer Relations Department of AVANGARD bank; Ruslan Nosov, Project Manager of “Integrated Solution for Scrap Industry” of Qiwi Bank; Anna Reznik, Product Manager of Jump Finance (Tinkoff Bank’s solution for payments to scrap collectors); Artur Avanesyan, Director of Payment Services Department of Mandarin functional payment platform.
The business programme continued with awards for banks and payment systems. Gazprombank, Qiwi Bank, Tinkoff Bank, Almaz, Mandarin, Vtorium, AVANGARD, Promsvyazbank, and Rosbank received the “Leader in Digital Financial Products for Scrap Dealers” award at the event.
The analytical part of the programme started next. In this block Victor Kovshevny, Director of the Association RUSLOM.COM, dealt in detail with the topic of the growth of the demand for metals in the world and presented a forecast for 2023-2030-2050. According to the forecasts for 2050, steel will be on the first place in the demand ranking, while gold will be on the second place.
In 2022, Russia ranked second behind China in terms of influence on the global metals market. At the same time, according to the speaker, Russia has the prospect of occupying 15% of the global market. By 2050, this share will amount to $450 billion, not taking into account sanctions and the projected processes of dividing the world into two blocs. Victor Kovshevny noted that by 2050 Russia’s weight in metallurgy is expected to increase in the world arena, India will also continue to grow rapidly. In addition, the speaker presented a forecast of the impact of the carbon tax in 2030-2050 on the production of steel, copper, aluminium, and lead.
Maria Bogdanchikova, Director of Marketing and Analytics at Vtorion, spoke about the features of monitoring market prices on the marketplace platform, noting that the growth in purchase volume per month was 28% and the number of shipments through the platform exceeded 12,000 with an average tonnage of 13 tonnes. The speaker also commented on the survey results and discussed with the audience the ferrous scrap price indices in different regions and the key price drivers. For example, delegates identified competition and demand from mills, as well as the move to cashless payments, as key current factors.
The next speaker was Irina Shilyaeva, General Director of CTS (Central Trading System), who discussed with the audience the trend in government regulation in terms of the transition of basic industries to a national price index and what metals and commodities it may be introduced for. She also noted that the CTS together with Rusmet Rating Agency started the formation of joint price indices for copper bars and copper rods (published on rusmet.ru), in the near future it is planned to add aluminium and lead.
Mikhail Gagarin, General Director of Industrial Market LLC, spoke about the benefits of electronic auctions. He noted that, until recently, specialised services for electronic scrap trading were practically non-existent, but now this area is actively developing, as it provides direct access to suppliers and buyers of recyclable materials and minimises the risk of dealing with unreliable players.
Teng Yue, General Manager of Huahong-Rus, the representative office of China’s Huahong Technology, shared the company’s global experience in scrap collection technologies and products. The company is the leading manufacturer of scrap processing equipment in China and supplies to 90 countries around the world. Separately, the speaker said that Hua Hong is not only increasing supplies to Russia, but also developing warranty and maintenance services in the country.
Vladimir Provotorov, an industry expert and business consultant, spoke about intelligent systems in scrap collection and increasing the efficiency of scrap acceptance control. He pointed out that the digitalisation of the scrap procurement and sales stages will help to reduce the number of contentious situations during acceptance and the risks of the “human factor”, which affect the final cost of scrap.
The business programme ended with a session dedicated to the lead market, during which Victor Kovshevny, Director of the Association RUSLOM.COM, presented an analysis of the lead and lead scrap markets, their price and volume indicators, supply and demand dynamics. He also presented the proposal of Agropribor company, which offers scrap market participants to diversify their business into systematic procurement of lead batteries with subsequent disposal of lead batteries to the plant, which is in constant need of raw materials.
Elena Dmitrieva, Advisor to the General Director of the RUSBAT Association, spoke on “The Russian market of batteries and lead in modern conditions”, presenting proposals for the development of the Russian lead battery industry, forecasts of changes in the structure of the battery market under different variants of import regulation. She also noted that the RUSBAT Association cooperates with RUSLOM.COM in monitoring the market situation and developing proposals to improve the efficiency of raw material procurement and supply of domestic enterprises.
As part of the session, Natalia Belyaeva highlighted the legal aspects of the disposal of used batteries by legal entities and individuals.
The session concluded with a discussion of challenges and opportunities for producers of lead, cable, batteries, and other lead products in Russia. Experts from the associations RUSBAT and RUSLOM.COM, Agropribor, Fregat, and Akron Holding spoke. According to Victor Kovshevny, these organisations hold more than 60% of the lead production market in Russia. The participants noted that measures should be taken to prevent a shortage of unprocessed lead, while at the same time developing the infrastructure for battery collection and modernising the production capacity of plants. At the same time, it was recommended to engage in a dialogue with the Federal Energy Agency (part of ROSATOM) and regulators in connection with the reform of the regulatory framework affecting the collection of recyclable materials. Legal entities generating used lead-acid batteries (ULABs) are obliged to hand them over to a federal operator for recycling at a tariff. At the same time, organisations that have their own facilities for handling waste of hazard classes I and II may independently dispose of used batteries by registering in the OPVK information system. The procedure for the disposal of batteries by individuals remains in place, but the authorities are preparing changes.
National Recycling Association RUSLOM.COM takes part in Made in Russia forum
On 19-20 October the international export forum “Made in Russia” took place in the Expocentre in Moscow. Representatives of the National Recycling Association RUSLOM.COM were speakers on the first day of the event.
The Forum has been held since 2012 and is one of the key platforms for Russian exporters and those who plan to expand their business, enter export markets and find new partners. The event allows participants to discuss topical issues of export activities and develop practical solutions to increase exports of Russian goods and services.
Forum participants include large, medium and small companies, banks, regional export support centres, federal and regional executive authorities, relevant associations and unions, business media and leading experts.
The Forum is organised by the Russian Export Center (REC).
More than 30 panel sessions were organised as part of the Forum, one of which was dedicated to the circular economy and the role of business in green exports. The session was organised with the support of the Russian Chamber of Commerce and Industry and moderated by the Chamber’s head Sergey Katyrin.
Among the speakers at the session: Andrey Lugovoy, Deputy of the State Duma of the Russian Federation, First Deputy Chairman of the State Duma Committee on Security and Anti-Corruption, Chairman of the Council for the Development of the Circular Economy and Ecology of the Chamber of Commerce and Industry of the Russian Federation; Dmitry Tetenkin, Deputy Minister of Natural Resources and Ecology of the Russian Federation; Sergey Egorshev, Advisor to the General Director for Environmental Monitoring, Russian Ecological Operator; Alexander Kobenko, Member of the Board of Directors, ACRON HOLDING; Alexander Boichenko, General Director, Perm Pulp and Paper Company; and Kolluru Krishan, Head of the Energy and Green Economy Working Council of the Indian part of the BRICS Business Council.
In his speech, Andrey Lugovoy emphasised the importance of the Council’s work and discussed plans to abolish personal income tax for individuals who deliver scrap and the role of the scrap industry in the development of the circular economy.
Andrei Lugovoy noted the importance of the law on cashless payments for scrap, which was passed in the summer. According to the speaker, some 300 billion roubles that were previously in cash circulation will gradually be transferred to transparent non-cash payments.
Mr Lugovoy said that despite the positive changes, the transition to the new system could cause difficulties, and in this regard a lot of work had been done connected with the consultations on the law’s entry into force, in cooperation with the National Recycling Association RUSLOM.COM.
In addition, Andrey Lugovoy stressed that an important task is the abolition of personal income tax for those involved in the delivery of scrap and waste. This issue is being actively discussed and the final decision will be made in 2024.
Victor Kovshevny, Director of the National Recycling Association RUSLOM.COM, spoke about the export potential of the Russian metallurgical and scrap metal industry. He also informed the audience in detail about the role of Russian metallurgy in the world, its technological and resource potential, and how scrap can help overcome barriers to Russian metal exports.
The speaker described the current situation with Russian exports of ferrous and non-ferrous metals, ferrous scrap, and presented a forecast of future metals in the world for 2030-2050. Thus, forecasting the growth of demand for metals, the director of RUSLOM.COM noted that Russia has the potential to occupy 15% of the metals market by 2050, taking second place after China. According to Mr Kovshevny, the scrap industry will be at the heart of such an achievement – the situation is extremely favourable due to the increased international role of carbon regulation. The speaker also explained that scrap is the basis of the circular economy in Russia, with one of the issues being the inefficiency of scrap collection – scrap is collected at half the rate it is generated.
The Director of RUSLOM.COM drew attention to the importance of vehicle recycling and called for joint efforts with the Chamber of Commerce and Industry of the Russian Federation in this direction.
In conclusion, Victor Kovshevny spoke about the level of necessary investments in the industry and the role of the state in the development of metallurgy and the scrap industry.
Alexander Kobenko, member of the Board of Directors of AKRON HOLDING, spoke about the development of waste recycling and the company’s significant achievements over the past three years. He emphasised that AKRON HOLDING is not only active in the field of scrap metal, but is also expanding its activities in the field of recycling polymers and other materials. The company actively cooperates with the oil and gas sector and is engaged in the processing of subsea cables. The company has reached a high technological level, and in this connection, it is planned to expand logistical cooperation with oil-producing companies in Latin America, the Middle East and African countries.
Mr Kobenko also addressed the issue of export quotas. This restriction is currently having a negative impact on the non-ferrous metals processing sector, resulting in insufficient collection of scrap. He informed the audience that in the last three years a number of countries, including Kazakhstan, have imposed counter-restrictions on the export of non-ferrous metals and scrap, which also creates obstacles to the balanced development of the industry.
NEWS OF RUSSIAN SCRAP PROCESSING INDUSTRY
Russia’s largest environmental project launched
Nornickel’s environmental project involves partial reconstruction of its metallurgical operations and construction of sulphur dioxide utilisation facilities.
This is expected to produce sulphuric acid from the emitted gases, which will then be neutralised with a mixture of water and lime. The lime will be supplied by the Mokulaevsky mine, which has sufficient reserves for at least 50 years.
Russian President Vladimir Putin said on 11 October that Russia would aim for zero emissions, but called for a gradual and thoughtful transition to green energy. According to him, our country’s energy sector is one of the greenest in the world – the share of gas in its structure is 43 percent, nuclear power – 19.7 percent, and the share of hydroelectric power is about the same.
Russia’s Federal Service for Supervision of Natural Resources to operate a register of utilisers
The government has amended the list of Federal Service for Supervision of Natural Resources (Rosprirodnadzor) powers under the extended producer responsibility. From the new year, the agency will operate a register of utilisers. Rosprirodnadzor will also no longer be responsible for the information system on waste from the use of goods and will no longer receive information on imported goods from the Federal Customs Service. The new version of the Rosprirodnadzor Regulation will enter into force on 01 January 2024.
Russian government introduces six-month ban on export of precious metals scrap
The Russian government has introduced a temporary ban on the export of waste and scrap of precious metals, Russian leading business newspaper Kommersant informs. The restriction will be in force from 1 November 2023 to 30 April 2024. Previously, such a ban was in force from 20 March to 20 September this year.
“The decision will increase the workload of Russian refineries and increase tax revenues. In addition, it will contribute to the reduction of illegal foreign trade operations related to the export of precious metals,” the government press service reported.
On 27 September, the government submitted for consideration a decision on a temporary ban on the export of waste and scrap precious metals for six months. According to the draft decision, the ban does not apply to the export of cathode antimony in ingots. The ban also does not apply to samples taken from batches of scrap and waste precious metals exported by organisations authorised to refine metals. In this case, a sample must not exceed 500 grams.
Russian Ministry of Defence reports more than 31,000 tonnes of scrap metal removed from the Arctic
More than 31,000 tonnes of scrap metal have been removed from the Arctic as part of work to eliminate environmental damage. This was announced by Russian Defence Minister Sergei Shoigu.
“During the navigation period, work on the elimination of environmental damage in the Arctic continued. In total, more than 31,000 tonnes of scrap metal have been exported to the mainland since the beginning of the project,” he said.
RUSMET RATING AGENCY INDICES
The Weekly Rusmet Index for Steel Scrap 3A FCA Russia domestic on 45th week 2023 (06 – 12 November) settled at 27 050 RUB/mt (ex VAT). Сompared to previous week the Index has increased by 100 RUB/mt (up 0,4%).
For 45th week 2023 (06 – 12 November) Rusmet Billet Index FOB Black Sea settled at 44 323 RUB/mt (up 2,1%), Rusmet HRC FOB Black Sea Index settled at 52 053 RUB/mt (down 0,7%), Rusmet CRC FOB Black Sea Index settled at 63 582 RUB/mt (down 0,9%), Rusmet Rebar FOB Black Sea Index settled at 45 350 RUB/mt (down 0,2%).
Rusmet Coal FOB Australia (62% CSR) Index compared to previous week decreased by $18 (6,5%) to 254$/mt, Index for Coal FOB Australia (70% CSR) compared to previous week decreased by $33 (9,5%) and is equal to 316$/mt.
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