A recent study highlights the challenges facing Russian scrap merchants due to a significant decline in consumption. Domestic ferrous scrap consumption has decreased by 32% since 2021, while exports outside the Eurasian Economic Union (EAEU) have plummeted by 71%. Additionally, domestic ferrous collections have dropped by 34%.
The Russian government has implemented export quotas and duties to ensure sufficient supply for local steelmakers and regulate domestic prices. However, these measures have not prevented a fall in demand, as mills increasingly opt for alternative raw materials like pig iron and hot-briquetted iron. This shift has put pressure on ferrous scrap prices, which have reached their lowest levels this year.
The study also notes rising transportation costs, with railway tariffs and fuel prices contributing to higher expenses for scrap merchants. Despite these challenges, the government continues to adjust quotas and duties in an effort to stabilize the market.
