ASC Files Complaint over Russian Government Restriction of Steel Scrap Shipments

The American Scrap Coalition (ASC) has submitted a letter to U.S. Trade Ambassador Ron Kirk over the Russian government’s recent administrative measure to restrict the export of ferrous scrap from a number of Russian ports in the eastern part of the country.

According to the ASC, a Russian Customs regulation, adopted on Feb. 13, 2012, prohibits the export of scrap from Russia’s two most widely used ports for shipments to the Far East. The two ports, in Vladivostok and Nakhodka, account for about 90 percent of Russia’s scrap exports in the Far East.

According to the Russian regulation, the only port in the eastern portion of the country that would be allowed to ship scrap is in Magadan, a port in the far northern part of the country.

Additionally, according to the ASC, the Federal Customs Service of the Russian Federation has released a draft decree restricting exports of steel scrap and other scrap products to certain ports in the Northwest Federal District of the country.

Significantly, the letter notes, the draft decree does not authorize scrap exports through St. Petersburg, the largest shipping point for Russian exports of scrap from the northwestern part of the country, which accounted for around 87 percent of scrap exports in 2011.

In its letter, the ASC writes the following: “The exclusion of Vladivostok, Nakhodka and St. Petersburg from the list of permissible shipping points represents a clear effort by Russia to erect yet more administrative barriers to exports of steel scrap, to the benefit of its domestic steel producers.”

Ultimately, the letter notes, scrap prices throughout the rest of the world would increase, leading to higher scrap exports from the United States and higher costs for U.S. consumers of scrap.