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Black scrap: melt can not be exported

Choose where to put an end to the uncontrolled export of scrap metal from the Far East, the law enforcers

Black scrap: melt can not be exported

In July of this year, Decree of the Government of Russia No. 19, adopted on May 2018, 584, "On the determination of checkpoints across the state border for departure from the Russian Federation outside the customs territory of the EEC of certain categories of goods" came into force in the Far Eastern Federal District. The document limits for 180 days the export of ferrous scrap through the main universal ports - Vladivostok, Vostochny-Nakhodka, Vanino. Now the export of scrap is allowed only through 9 ports. These are Petropavlovsk-Kamchatsky in the Kamchatka Territory, Magadan in the Magadan Region, Cape Lazarev, Nikolaevsk-on-Amur, Okhotsk and De-Kastri in the Khabarovsk Territory, Moskalvo, Prigorodnoye and Shakhtersk on Sakhalin. 

The measure was adopted to support metallurgical production in the Far East, which is represented by a single enterprise - the Amurstal plant (formerly Amurmetall). In 2013, the company, which at that time was owned by Vneshekonobank, began to experience difficulties. In 2017, the bankrupt company was bought out by the Torex group of companies, which managed to restart the main production processes. The maximum capacity of Amurstal is 1 million tons per year, and it can be reached as early as 2019. In 2017, the plant produced 187 thousand tons of products, from the beginning of this year to the end of August - more than 360 thousand tons. The plans for 2018 are 700 thousand tons of products. 

The only objective constraint on the way to increase production volumes for "Amurstal" has always been scrap metal - now it is a non-alternative raw material. "It's no secret that in the Far East there is a deficit of scrap metal, and as metal scrap, including abroad, decreases, the metal fund is declining," says Sergei Kuznetsov, general director of Amurstali. "Export restrictive measures are not a panacea. to find loopholes, how to circumvent the ban, or wait these six months, accumulating reserves.This is a very big money, and no one wants to lose them. "

Over the past year, the company received 203,1 thousand tonnes of ferrous scrap, they say in Torex, from January to the end of August this year - 447,9 thousand tonnes of scrap. For the production of 1 tons of finished products, 1,1 tons of scrap is needed. The Far Eastern enterprise is forced to win competition for raw materials with the largest metallurgical holdings of Asian countries. And all because scrap metal is more profitable to export than to supply to the domestic market.

Seminar Margin

The purchase price of ferrous scrap in the Far East, according to the data specified in the commercial offers of Rusmet LLC, is 17 rubles per ton - $ 900 at the current exchange rate. In South Korea, they are ready to buy scrap for $ 262-345 (including $ 348-12 for transshipment at the port). But this is only one of the facets of the problem. The average price for declaring export scrap metal, according to the DVTU (for the first half of 18), is $ 2018 per ton. Thus, exporters "save" millions of rubles on export duties, which amount to 227% of the declared value of scrap. Of course, with a really higher metal price abroad, it is much more profitable to send raw materials for export. 

Attempts to influence the situation with the withdrawal of the bulk of scrap through the Far East for export (it is estimated at 1 million tons annually) have been undertaken more than once. Similar bans on the export of scrap metal from the ports of the Far East were introduced in 2008 and 2011 years. Exporters appealed against these norms. They went on this way and now. This time, a lawsuit filed with the Supreme Court was made by the non-commercial partnership "National self-regulating organization of scrap and waste recyclers of ferrous and non-ferrous metals, utilization of vehicles." The hearing will begin in October 2018. 

"Naturally, metallurgists believe that this decision of the government of the Russian Federation was really a necessary measure of support: it was simply impossible to reach an agreement with exporters in other ways." The fact that the government's decision is being appealed is not a new story. scrap is someone's business that brings hundreds of millions of rubles annually, "they say in Torex.

One of the "kits" of Komsomolsk-on-Amur

Discussion about what is more important - supporting the business of metal traders and stevedores or the preservation of "Amurstal" - goes, without stopping, from 2009 year. Then OJSC Amurmetal was declared bankrupt, being unable to pay multi-billion debts to the pool of Russian and foreign banks, the plant suspended the work of all the shops. 

Vladimir Putin intervened in the situation, then holding the post of Russian prime minister - he instructed Vnesheconombank to buy out the plant from the structures of State Duma deputy Alexander Shishkin, open a credit line to pay interest on bank debts and find a compromise with creditors. VEB, as it could, tried to manage the enterprise, but in 2013 year began a search for either a professional management company or a new owner. As a result, the plant moved to the group "Torex", which owned a network of scrap procurement.

Attention to "Amurmetal" of the first persons of the country is understandable: the plant is one of the "three whales" of the Komsomolsk-on-Amur industry, represented also by the Sukhoi holding aircraft factory and the Amur shipbuilding plant that is part of the United Shipbuilding Corporation. With the "Amurmetal" closely linked the fate of thousands of Komsomol members: before the crisis at the plant was more than 6 thousand employees, together with families it - tens of thousands of people. To leave them on the street in conditions of deficit in Komsomolsk-on-Amur of regularly paid and prestigious work would mean a social catastrophe. Given that the city continues to lose its population, rushing in search of a better share in the more developed cities of the Far East or the west of the country, such a scenario would be unacceptable. 

The second important aspect is active construction in the Far East, launched in recent years. In fact, having started with large-scale construction projects for the APEC-2012 summit in Vladivostok, the process does not lose momentum, including thanks to the arrival of world-class megaprojects in the region. Any construction projects need metal, the only supplier of which in the Far East is Amurstal. This year, the parameters for the construction of the infrastructure project of the decade - the bridge crossing to Sakhalin, should be determined. The experience with the Crimean bridge showed that such objects require colossal volumes of concrete and metal. Amurstal can also provide the latter.

According to customs statistics, scrap exports in 2017 amounted to 1,036 million tonnes of ferrous scrap. In total, the Far East exported 61,16 million tons of cargo. Tonnage scrap is only 0,5% of the total freight turnover of the Far Eastern ports, or 1,7% of officially registered exports. The total customs value of the scrap removed is $ 177,92 million, or 0,8% of all goods declared by all exporters of $ 22,24 billion. 

Thus, on one side of the scale are the percentages of the volumes of the Far Eastern economy - and the functioning of the basic enterprise of a large industrial city in the region. 


It is noteworthy that the ban on exports of scrap through the main ports of the Far East is already in place, but it has not really worked in fact. Exporters use remote declaring in ports from the list of allowed. 

For example, 4 August of this year, the Orange Link ship was loaded with metal waste in Vladivostok, 8 August left for Sakhalin in Prigorodnoye, and already 13, went from Prigorodny to South Korea. In Prigorodnoye, according to Rosmorport, there is no technical possibility of unloading dry cargo - there are no corresponding quay walls, since the port is used for export of LNG. Therefore, the cargo was not examined by customs, which makes the entire export process absolutely not transparent. 

LLC "Torex" has already applied for a verification of such a scheme for sending scrap for export to the Office of the Prosecutor General's Office in the Far Eastern Federal District, and the fact is verified by the Sakhalin Transport Prosecutor's Office. In "Torex" believe that the scheme used to send scrap abroad is used by unscrupulous traders who took the position "arbitrarily, but only for export." "Exporters said last year that they do not want to sell scrap to the plant because they are afraid that the price will decrease over time." A year and a half after the new owner went to the plant, the price only continued to grow. "With 8 thousand rubles per tonne rose up to 16 thousand rubles per tonne, and it has never been lower than that offered in South Korea.In fact, it is more profitable for exporters to sell scrap here, as they will get money faster for it, and the factory works on prepayment. - exports "- say in" TOREKS ". 

Sergei Kuznetsov believes that in the long term, Amurstal needs to look for new sources of raw materials instead of scrap, the deficit of which will only grow. Alternative sources are iron from ore, direct reduction iron or cast iron, which can be used in electric furnaces of the plant as a mixture to scrap. Up to 50% of the current raw materials can be replaced with cast iron, up to 25% - pellets. But the use of such technologies will require long-term investments in the modernization of production: iron ore concentrate, for example, will have to be restored, for which production requires natural gas. And even after that, without any scrap, Amurstal can not work anyway. "Will we be provided with the required volumes of raw materials, will the price suit us, is the cost comparable with the price of scrap metal - all this should be considered," says Sergei Kuznetsov. 

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