The event’s Strategic Partners are the National Recycling Association RUSLOM.COM, ROSCONGRESS, the National University of Science and Technology (MISiS), and the Plekhanov Russian University of Economics.

The event will be attended by the Federal Antimonopoly Service, the Ministry of Industry and Trade, the Ministry of Economic Development, the State Duma, licensing authorities of Russian regions, as well as delegations from India, China, Iran, and Turkey.

MIR-Expo will be held in a unique non-stop networking format. This year a new participant package – Exhibitor – is introduced. More than 1,000 delegates, who are leaders in the scrap and metal markets, are expected to attend.

The business programme includes:

• Conference on production growth and optimisation of resource supply of stainless-steel enterprises. The Partner is Zlatoust Plant.
• Conference on logistics of metals and metallurgical raw materials. Partner: ROSCONGRESS Fuel Card.
• Import substitution of information and technology.
• Coal conference.
• Session on metallurgical plants’ raw material supply.
• Round table on scrap export.
• Conference on rare-earth and precious metals and scrap, e-waste.
• Workshop on control and supervision of the scrap market.
• Presentations, scientific reports, pitch sessions etc.

The International Forum Scrap of Ferrous and Non-ferrous Metals, taking place for the 18th time, will traditionally become the central event.

The Forum is a high-status business platform for scrap professionals from Russia and the world, which allows them to share best practices, address industry issues, and obtain the most up-to-date analytics and strategic information on the ferrous, non-ferrous, precious metal scrap, secondary raw materials, and environmental matters.

The annual generation of scrap in Russia is 49 million tonnes, but only less than 30 million tonnes are collected. It is crucial to stimulate not only the collection of scrap, but also the quality of its recycling.

The Eurasian Economic Union is a new and a fast-growing recycling market that generates 1.5 million tonnes of e-waste per year; this volume can be estimated at 400 million euros. At the same time, it is necessary to expand markets, increase consumption, and upgrade capacities.

The recycling of end-of-life vehicles is on the list of priority measures aimed to develop scrap industry in Russia. There are more than 60 million car owners in our country; additionally, numerous companies have their own vehicle fleets. 2 million tonnes of ferrous scrap could be potentially collected from vehicle recycling per year, followed by batteries, plastics, and rubber. This is a significant source of secondary raw materials of high value, which can be estimated at more than 10 billion euros per year. In addition, it is necessary to encourage the collection of hard-to-recover scrap through programmes for cleaning water areas, buildings dismantling, and collecting scrap in difficult climatic zones.

To achieve these goals, there is a need for a transparent business environment, equal competitive conditions, attractive investment climate for developing the technology base and infrastructure, and balanced state regulation. These pressing issues, as well as many others, will be discussed on the margins of the Exhibition and the Forum.

Please visit the official web-site of the event for terms and conditions.

Web-site: www.mir-expo.com

Phone: +7(495)980-06-08; +7(964)799-51-18

E-mail: info@mir-expo.com; lom@rusmet.ru

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During the event, the participants discussed the current situation on the Russian and world markets for scrap and metals in the context of export restrictions, potential ways of developing foreign economic activity in the field of metallurgy and scrap procurement, new technologies in the scrap market and in the field of waste disposal, as well as the environmental agenda.

The event was opened with his opening remarks by the Deputy Chairman of the Committee for External Relations of St. Petersburg Arbi Abubakarov. The speaker noted the importance of holding a round table and similar events for establishing new ties and effective dialogue between the business community and government authorities.

In continuation, the head of the Export Development Department of the Committee for Industrial Policy, Innovation and Trade of St. Petersburg Anna Varyagina and Vladimir Volodkin, President of the NSRO RUSLOM.COM Association, presented their greetings for their contribution to the development of raw materials safety and environmental friendliness of metallurgy …

The next speaker of the round table was Viktor Kovshevny, Director of the Association NSRO “RUSLOM.COM”. He noted that in the context of the scrap market, St. Petersburg is an export-oriented region. At the same time, the contribution of scrap collectors to the economy of the Northwestern Federal District is very significant – 1 workplace of a scrap collector creates 4 jobs in related industries, and the economic contribution of the scrap collecting industry to the gross regional product is about 99 billion rubles. Moreover, there is significant growth potential. Due to diversification and increased efficiency, the industry in the region can grow 3 times by 2030.

Referring to the current situation on the scrap market, Viktor Kovshevny drew the attention of the event participants to the fact that Russia possesses a colossal metal fund – its volume exceeds 1.6 billion tons. This clearly indicates that there is no shortage of scrap in Russia.

Andrey Savelyev, Deputy Head of the Non-Ferrous Metallurgy Development Department of the Ministry of Industry and Trade of the Russian Federation, presented a plan of priority measures to increase the efficiency of the scrap market. Among the most significant, the speaker noted: the transition to non-cash payments with individuals, increased liability of individuals for violation of the rules for working with scrap, cancellation of personal income tax from the delivery of scrap.

In addition, the speaker drew attention to the reform of control and supervision activities in the market for ferrous and non-ferrous scrap, which is currently being worked out by the Ministry of Industry and Trade of Russia. Its purpose is to clarify the requirements for which there was the greatest legal uncertainty. In addition, enterprises will be assigned a risk category to determine the frequency and depth of licensing compliance checks. Another innovation will be the involvement of industry SROs in inspections.

Sergey Kurnosov, General Director of Uni-Blok LLC, spoke about the regional experience and peculiarities of the scrap market in St. Petersburg. According to the speaker, the surplus of scrap in the region is 1.7 million tons per year, and this scrap is not in demand by metallurgists. The reasons are in the peculiarities of logistics and capacity distribution.

At the same time, there is a surplus of carbon-free electricity and a surplus of personnel in the region. All this suggests that it is necessary to invest in the creation of production facilities in the region.

Referring to the issue of export duties, Sergei Kurnosov said that he supported the introduction of duties on the export of raw materials. According to the speaker, this contributes to the fact that the processing will remain on the territory of the Russian Federation.

The position of the Association against the introduction of duties is known; all the more valuable is the presence of different opinions of market professionals during the round table, which objectively represents the points of view of the participants in the discussion. The next speaker was Dmitry Potapenko, an entrepreneur, blogger, economist. The speaker expressed his attitude to the issue of introducing export duties.

According to the entrepreneur, the current approach to the introduction of duties is fundamentally wrong. It does not lead to real consumer support – as a result, metallurgists will stop their investment programs and development will stop.

Nikolay Malykh, the founder of INTERVTORRESURS LLC, spoke about the importance of scrap and metal exports for maintaining the market balance, and also highlighted the position of the business on export restrictions and an increase in export duties on metals and scrap.

The quotas, and then the increase in duties on scrap, had a strong impact on exporters of scrap metal. At the same time, according to the speaker, the introduction of duties on metal somewhat balanced the situation.

Mikhail Tarakanov, Director of MegaRex LLC, made a presentation on new technologies in the scrap market and in the field of waste disposal. The speaker presented proposals on a possible way to increase scrap collection in Russia.

The volume of scrap metal that does not require deep processing and complex mining is limited. The exemption from export duties for shredding scrap will allow the recycling of those types of metal-containing waste that are not currently being recycled. Since the shredder does not process scrap metal thicker than 6 mm, then, accordingly, those types of scrap that are currently most in demand from Russian metallurgists will not be involved in export. At the moment, private companies have only a few units of shredders in Russia, an increase in their number will significantly improve the deeper processing of metal-containing waste and bring into circulation the scrap metal that was previously not in demand on the market and, in fact, was simply thrown away, clogged the soil and worsened the environment.

Continuing the event, the Director of Vtorium Alexander Andreevsky spoke about new opportunities for working in the field of settlements with individuals, suppliers of scrap through integration with the Sberbank ecosystem.

To test the system, you can connect to the Vtorium system, open an account with Sberbank and set up a personal account. The staff will assist you.

Mikhail Gagarin, Development Director of Rusmet Rating Agency, touched upon the investment attractiveness of recycling. According to the speaker, the lack of large investments in the industry is due to the fact that now the industry is not entirely transparent and investments are high-risk. It is noteworthy that this statement was contested by several leading participants in the scrap processing industry, who have the highest ratings from Rusmet. These participants spoke about its high profitability and investment attractiveness, the transparency of their enterprises for potential investors. Thus, the role of the rating of market participants by Rusmet becomes obvious, reflecting the objective economic reality, on the one hand, and the current state of the leading enterprises in the industry, whose activities are at a high global level, on the other.

Andrey Zelenin, General Director of Rusmet RA LLC, drew attention to another aspect of the appropriateness of rating, which allows supplying bank compliance and government authorities with ready-made solutions for the reliability of scrap collectors.

Touching upon the issue of the introduced duties on the export of scrap and metals, the speaker noted that, in his opinion, such measures will not lead to a decrease in the cost. Regulation must be placed in the hands of the market.

Expert Vladimir Zotov continued the round table with a presentation on the role of scrap collectors in optimizing the carbon footprint. The scrap harvesting industry is an effective mechanism for reducing the carbon footprint and increasing the competitiveness of exported products.

The carbon footprint of primary metals production differs significantly from secondary metals production. The speaker believes that due to such a difference, it is possible to generate carbon credits and sell them through the register being created in the Russian Federation. 100 tons of scrap steel saves 157 tons of CO2. The cost of carbon units on the European market is 50-57 euros per tonne.

At the end of the round table, the participants took part in the discussion. During the discussion, scrap collectors emphasized the usefulness of the format of the event with the participation of regional authorities and proposed to conduct more active communication with them on topical problems of the industry, including during future events of the Association in St. Petersburg.

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Deputy Prime Minister Yuri Borisov did not support the introduction of quotas for the export of ferrous scrap. Kommersant was informed of this by two sources in the industry, familiar with the text of the Deputy Prime Minister’s order, given in September. By means of this order, Yuri Borisov instructs the Ministry of Industry and Trade and other relevant ministries to work out possible mechanisms for regulating the scrap market ‘in order to supply consumers with strategic raw materials unconditionally’ and report to the Government by October 1, 2020. The representative of Mr. Borisov left Kommersant’s inquires without response.

The introduction of quotas was initiated by the Foundation for Development of Tube Industry (FRTP), which represents the interests of the largest pipe companies. The Foundation proposed to limit exports to countries outside the EAEU with a quota of 1 million tons for six months. Otherwise, the Foundation forecasts a decrease in steel production in Russia by 2.5–4 million tons. Among the market participants, quotas are supported by Severstal, the Abinsk Electric Steel Works and Magnitogorsk Iron&Steel Works (MMK). A representative of MMK confirmed to Kommersant that the company supports the introduction of quotas for the export of scrap metal due to the current shortage in the domestic market.

A Kommersant’s source in the market estimated the shortage of scrap in September at 400 thousand tonnes.

Igor Malyshev, the director of the FRTP, told Kommersant that scrap prices on the domestic market have been growing for the last five months and have already reached their maximum historical level, which was two years ago. ‘For example, in the Ural region, now, at the beginning of September, a historic record of scrap prices has already been reached. The reason is the limited supply of scrap after the pandemic and the ban on its import from Kazakhstan. The overwhelming majority of metallurgical plants confirmed the deterioration in the provision of scrap and the need for export restrictions at summer meetings in the Ministry of Industry and Trade’ he says. Mr. Malyshev recalls that only Russia out of the five EAEU countries has no significant restrictions on the export of scrap. Igor Malyshev also stressed that, based on the wording of Yuri Borisov’s instructions, an additional analysis of the situation will be carried out.

The quotas were opposed not only by scrap collectors themselves, but also by the Ministry of Economic Development and the Federal Customs Service. The Ministry of Economic Development saw the introduction of quotas as a violation of Russia’s obligations to the WTO.

The Customs Service believed that quotas would not achieve their goals, since raw materials would be exported through the EAEU countries. In addition, Russian ports opposed the quotas, fearing a reduction in export trans-shipment.

Commenting on Yuri Borisov’s order on the need for stable scrap supplies, Viktor Kovshevny, the director of the Association of Metal Scrap Processors RUSLOM.COM, notes the need to stimulate scrap collection, for example, through equipment recycling programmes. He also added that the abolition of individuals’ personal income tax on sale of recyclable materials would also help the situation, making people unafraid to deliver scrap.

According to Maxim Khudalov from ACRA, the situation with scrap collection is improving. Thus, shipments to plants in August 2020 were actually equal to amounts of August 2019. According to the expert, the plants possess approximately a two-month supply of scrap in their warehouses, which is not unusual on the eve of winter. ‘Domestic scrap prices are growing, but they reflect the dynamics of export prices and the depreciation of rouble’, says Maxim Khudalov. In his opinion, it is premature to talk about a deficit of scrap, since the demand for its processed products, in particular rolled metal, remains rather weak.

By Kommersant Newspaper

https://www.kommersant.ru/doc/4483859

09.09.2020

Evgeniy Zaynullin, Kommersant Newspaper

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The Association considers such initiatives unreasonable and extremely dangerous for the scrap industry. The pipe producers union explains the need to introduce restrictions on a possible shortage of metallurgical raw materials during the period of quarantine measures in the country, which is not true. At the moment, there are no recorded cases of metallurgical plants shutdown or disruptions in production due to lack of scrap.

At the same time, there are currently no prerequisites for an increase in steel production, since the world has seen a slowdown in the economy and a significant decline in demand for metal. The initiators of the restrictions introduction lack substantiated arguments in the form of real contracts, applications or requests, government orders and other weighty legal grounds that confirm plans for the growth of metallurgical production in Russia and the lack of the possibility of acquiring scrap without taking prohibitive measures.

For an objective assessment of the situation RUSLOM.COM prepared a balance of procurement and consumption of ferrous scrap for 2017-2019, with a forecast for 2020. For calculations, we used data from metallurgical plants for the transportation of ferrous scrap, including rail, road and water. For analysis, we took the Russian Railways database, data from the Federal Customs Service of Russia, expert estimates, and the results of monitoring the opinions of scrap market players through a survey and questionnaire. Calculations were made on the use of scrap in the metallurgical charge for each of the plants.

The data obtained indicate that in the period from 2017 to 2020, the peak of scrap procurement and consumption in Russia was in 2018. In 2019, there was a decrease in the procurement of scrap of ferrous metals compared to 2018 by 1 million tons. This was due to two factors. The first of these is the global trend to reduce the consumption of finished metal products, which has spread to Russia. But to a greater extent, the reduction in procurement occurred due to the restriction of export of ferrous scrap from the country, introduced in September 2019.

This undermined scrap procurement in the country, and metallurgists did not fulfill their promises and, as a result, reduced, rather than increased, steel production. As a result of the restrictions, the Russian federal budget incurred customs losses in excess of 340 million rubles and 6,8 billion US dollars in foreign exchange earnings. The inevitable closure of scrap stores and the loss of jobs in the regions followed.

At present, domestic consumption of ferrous scrap by metallurgical plants is less than 27 million tons and will decrease due to global trends by at least another 10-15%. At the same time, more than 45 million tons of scrap and waste of ferrous metals are generated annually in Russia, which indicates a significant reserve for the return of raw materials to the economy. There are more than 110,000 unauthorised landfills in Russia, in which more than 250 million tons of metals are buried. And it is this scrap metal that should change its current status – from the status of accumulated environmental damage to the status of raw materials for metallurgy, thanks to state support measures.

According to the results of 2020, due to a decrease in demand for Russian metal products, the needs of domestic metallurgists may be significantly reduced. In Europe and the USA, according to the results of the 2nd quarter of 2020, a drop in metal production is expected to reach 70%. At the same time, export will provide an opportunity to maintain the scrap collection infrastructure in a working condition. In addition to this, in a number of regions, due to the peculiarities of logistics, scrap export is the only option for it to be actually sold. An attempt to solve local industry problems of certain consumers through quotas for the export of ferrous scrap will reduce the volume of scrap exports in 2020 by more than 29%.

Into addition, the introduction of quotas can be a direct threat to maintaining social stability, especially in the regions of Russia with low average per capita incomes. Scrap and metal waste management activities provide jobs for more than 60 thousand qualified professionals throughout the country, and make it possible for another 2 million people at least who are handing over scrap, to make a living.

Kazakhstan provides a vivid example of the consequences which export restrictive measures may have on the sector and the economy as a whole. The ban on exports had an extremely negative impact on the transparency of the scrap industry and production indicators. In Kazakhstan, scrap smuggling is recorded annually in the amount of 1 million tons, the price of scrap doubled due to a drop in collection by individuals and legal entities, metallurgical plants reduced production.

RUSLOM.COM clearly stands against the introduction of restrictive measures and is doing everything possible to convey the position of the industry to government representatives. Thus, the Association has already sent to the Department of Metallurgy and Materials of the Ministry of Industry and Trade of the Russian Federation a response to the proposal to introduce a temporary quantitative restriction on the export from the Russian Federation of waste and scrap of ferrous metals. In addition, a letter is being prepared to the Chairman of the Government of the Russian Federation Mikhail Mishustin.

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