A previously reported effort in Russia to create ferrous and nonferrous scrap export trading contracts has apparently stalled. Factors cited in media reports include a downshift in scrap generation caused by COVID-19 restrictions and changes in personnel at key Russian government agencies.
A May 30 news report in the Hellenic Shipping News publication says the exchange effort “has been put on hold indefinitely.” The effort was considered too “labor intensive” in a COVID-19 landscape that requires attention to other areas.
The exchange contracts would have been compulsory for scrap emanating from state-owned corporations and sold within both the domestic and export market, according to the report.
On the export front, Russia shipped out slightly more than 4 million metric tons of ferrous scrap in 2019, according to statistics gathered by the Brussels-based Bureau of International Recycling (BIR).
That figure already represented a 27 percent decline in volume compared to 2018, and 2020 is on pace for another drop in volume if COVID-19-related restrictions continue to hamper Russian economic activity.
Beyond the economic considerations, according to the Hellenic Shipping News, some former backers of the exchange concept may no longer wield any influence over the effort. “The Russian government reshuffle in January led to the departure of industry and trade ministry officials who were promoting the change,” reports the publication.
Internal politics may cause the idea to gain and lose favor in turns. Steel companies in Russia generally favored the idea of having a means to control scrap exports. However, for a nation that needs overseas currency at the same time demand and pricing for its oil have been problematic, scrap exports can help fill the gap, say observers.
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