Russian Scrap Sector Faces Export Ban Uncertainty, Demand Shifts

SEATTLE (Scrap Monster): Russia’s scrap metal sector is facing mounting uncertainty as industry leaders debate export restrictions and shifting raw material strategies. Viktor Kovshevny, Director of NSRO RUSLOM.COM, has pushed back against calls from Ivan Demchenko, President of the Association of Electrometallurgical Enterprises, to impose a full ban on scrap exports to prevent shortages.

Kovshevny argues that limiting exports would weaken independent scrap collectors, reduce competition, and ultimately drive up domestic prices. He emphasized that exports currently offer marginal profitability due to high logistics costs but remain essential for the survival of many market participants.

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At the same time, structural changes in steel production are reducing scrap demand. Major producers such as Magnitogorsk Iron and Steel Works and Severstal have significantly cut scrap consumption, increasingly relying on iron ore feedstock and hot briquetted iron. Even pipe producers like OMK and TMK are gradually shifting toward alternative raw materials.

Smaller mills, including AEMZ and Amur Steel, now account for limited scrap demand, estimated at under 7 million tonnes annually. Overall, Russia’s total scrap consumption is unlikely to exceed 15 million tonnes even after market recovery.

Despite scrap generation exceeding 50 million tonnes annually, collection infrastructure has sharply declined, with over half of collection sites shut down.