Irkutsk
Ulan-Ude

Blagoveshchensk
Chita
Yakutsk

Birobidzhan
Vladivostok
Khabarovsk

Magadan
Yuzhno-Sakhalinsk

Anadyr
Petropavlovsk-
Kamchatsky
Moscow

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Ports pierced the scrap

The authorities for the third time limited the export of scrap metal in the Far East

Last week it became known about the next restriction of scrap exports from the ports of the Far East - having excluded from the list all the main universal ports of the south of the macroregion connected with the railways, the government actually imposed a ban on the export of scrap to Asia. The measure will enter into force in July and will be in effect for a minimum of 180 days. The market is unhappy with the fact that only the only metallurgical plant in the Far East - Amurstal, traditionally experiencing a severe shortage of raw materials - remains in the lead. Who will be the main victims and what is the scale of the business of harvesting and selling scrap in the Far East, EastRussia found out.

Ports pierced the scrap
Photo: shutterstock.com
NINE PORTS - AND NOT ONE

On May 19, the government of the Russian Federation adopted Resolution No. 584 "On the Determination in the Far Eastern Federal District of checkpoints across the state border for departure from the Russian Federation outside the customs territory of the EEC of certain categories of goods." The standard applies to ferrous scrap. Since 2015, scrap metal has been a strategically important commodity for the Russian domestic market, and bans or restrictions may be imposed on its export. According to a document published on May 22, the export of scrap metal will be possible only through nine Far Eastern ports. Among them are Petropavlovsk-Kamchatsky (Kamchatka Territory), Magadan (Magadan Region), Cape Lazarev, Nikolaevsk-on-Amur, Okhotsk, De-Kastri (Khabarovsk Territory), Moskalvo, Prigorodnoye, Shakhtersk (Sakhalin). 

The new rules will take effect within 60 days after publication and will be valid for 180 days. The largest port nodes of the Far East, to which the main stream of general and bulk cargo goes - Vanino, Nakhodka-Vostochny, Vladivostok - did not fall into the list of export points. Railways do not lead to the ports listed in the resolution, although rail transport is the key in the supply of ferrous scrap. Only within the Far Eastern Railway for 2017 year 216 thousand tons of scrap were shipped, but the main cargo to the Far Eastern ports comes from Siberia: according to the data of the "RUSLOM.COM" scrap processing group, over the past year from Irkutsk to Vladivostok, the railway transport transported 1,33 million tons of scrap, automobile - 280 thousand tons. According to the statistics of the FCS, 1,4 million tons of 1 million tons of scrap collected in the Far East are exported annually.

At the same time, it should be understood that some of the ports through which scrap will be allowed to open are not open all year round, and through some, such as Prigorodnoye and DeKastri, mostly liquid cargo is sent (dry cargoes from the first are sent by "Dallesprom" , the second - no one). In fact, only the universal ports of Magadan and Petropavlovsk-Kamchatsky remain at the metal traders. And theoretically, exporters, having loaded scrap from wagons to ships, can take it by sea to the nearest "authorized" port to declare, and then send to consumers - to the countries of Asia. But whether they will go to such significant additional costs in practice is a big question.

Through which ports of the Far East it will be possible to carry scrap (Rosmorrechport data)

Sea port
Throughput capacity of cargo terminals, thousand tons per year
Including dry cargo, thousand tons per year
Navigation
Shakhtersk
2 300
2 300
1 March - 1 of January
Magadan
2 990
2 050
All year round
Petropavlovsk-Kamchatsky
2 060,6
1 262
All year round
Nikolaevsk-on-Amur
784,4
695,6
May - November
DeKastri
12 350
350
All year round
Moskalvo
600
192
June - November
Okhotsk
156
150
15 May - 15 November
Cape Lazarev
100
100
1 May - 30 November
Suburban
19 600
0
All year round


However, such difficulties are not new for metal traders. In 2008, the Russian authorities already restricted the export of scrap through all Far Eastern ports, except for Petropavlovsk-Kamchatsky. The ban was regulated by order of the Federal Customs Service and existed in 2009 for six months. Exporters contested it with the FAS, and the norm was canceled. On November 26, 2011, government decree No. 1148 was adopted, banning the export of ferrous scrap through any ports in the Far East, except Magadan. It also operated for six months. Thus, the current attempt to restrict exports is the third in a row in the last 10 years.

DEFICIT ON THE BACKGROUND OF ABUNDANCE

An active discussion about a new possible ban on the export of scrap through the largest ports of the Primorsky and Khabarovsk Territories has been going on since 2017. On the market, the measure was directly linked to the intentions of the Ministry of Industry and Trade to support the only existing metallurgical production in the Far East - the Amurmetall plant, for which scrap metal is the only possible raw material. At the third Eastern Economic Forum, a member of the board of directors of Vladivostok Sea Fishing Port Denis Sarana said: “This is not the first attempt to ban exports. All this is done to support one enterprise - the Amurmetall plant from Komsomolsk-on-Amur. But you can support the industry , it is impossible - a separate enterprise ".

Whatever it was, the metallurgical industry in the Far Eastern Federal District is currently represented only by Amurmetal (the historical name Amurstal is also used), which after a protracted bankruptcy at the beginning of 2017 was bought out by the group of companies Toreks. Until 2017 on 50% of the company with shares of 1 million rubles. belonged to Nikolai Mistryukov (partner of the State Duma deputy from the LDPR Sergey Furgal) and Larisa Starodubova. But last spring in the company's share capital with a share of 2 million rubles. Pavel Balsky - partner of Arkady Rotenberg joined. Interest of the latter to the asset may be related to the prospects of building a bridge on Sakhalin, which will require a lot of metal. In the interests of Rothenberg or not, but Mr. Balsky received 50% of the company and became the head of its board of directors. The shares of co-founders are pledged to PJSC "Orient Express Bank" under a credit line agreement.

Torex has its own scrap collection network in the Far East, but it only provides up to 200 thousand tons of raw materials per year. The maximum pre-crisis capacity of Amurmetal is 1 million tons of steel products per year, but the enterprise has not yet reached pre-bankruptcy volumes. In January 2018, while accepting the Khabarovsk Governor Vyacheslav Shport at the plant, the executive director of Torex-Khabarovsk LLC Sergey Zyubr said that in 2017 Amurmetall produced 187 thousand tons of finished products, and in plans for 2018 - 700 thousand tons.

In February 2018, RUSLOM.KOM members informed the Deputy Minister of Industry and Trade Sergey Tsib that they were ready to voluntarily provide supplies to Amurmetal up to 660 thousand tons of scrap per year. Five companies were ready to take on the largest obligations: Translom promised to supply 140 thousand tons (the former structure of Russian Railways, through the Moscow-based Kronos LLC belongs to the partner of President's assistant Igor Levitin Alexey Zolotarev), 130 thousand tons - Dalvtormet ( controlled by Yuri Pisarenko through the Khabarovsk LLC "Aquila"), 100 thousand tons - GC “Metalltorg-Vostok” (owned by the Primorsky businessman Alexei Mitrofanov), 60 thousand tons - GC “Sibirvtormet” (controlled by the Khabarovsk businessman Andrey Kim), 30 thousand tons - tons - GK "Gefest". True, the companies of the association asked the Ministry of Industry and Trade not to prohibit the export of scrap, and Amurmetal asked to buy raw materials at market prices and not have debts to suppliers. 


SHIPPING MINUS BILLIONS

The government's decision leaves at least a choice for exporters: to sell raw materials only to Amurmetal at a price agreed by the plant, or to look for new buyers inside the country. Note that the average customs cost of a ton of scrap, based on the statistics of the Federal Customs Service for 2017 for the ports of the Far East, amounted to about $ 172 - 9,9 thousand rubles. In "Torex", however, have already stated EastRussiathat they consider this statistic to be underestimated. The average price of a ton of scrap in the Asia-Pacific markets, according to metaltorg.ru, in the spring of 2018 ranges between $ 320-350 (19,2-21 thousand rubles) per ton. The average price of a ton of ferrous scrap on the domestic Russian market is much lower - 11-12 thousand rubles. per ton. Potential losses of scrap exporters due to the difference in prices from 7 rubles. for each ton, they are poured into billions of rubles.

Torex today announced that they are ready to buy back from the traders the remains of scrap metal that will accumulate after the entry into force of the export ban through the ports of the south of the Far East to meet the needs of Amurstal is about 100 thousand tons a month, "like before , are ready to work with all suppliers at market prices. " The plant's general director Sergey Kuznetsov stressed that "for every ton of supplies needed to fight with South Korean factories," which "always offered inflated prices." "There should not be any questions about limiting competition at all, because in the Far Eastern region, the purchase of scrap metal, in conjunction with the Amurstal plant, has for many years been actively carried out by large Western metallurgical plants - Magnitogorsk Iron and Steel Works and EVRAZ (SGMK -Trade ")," he added ..

Meanwhile, it is obvious that the main victims in this situation are by no means traders. But the stevedores of the south of Primorye have no choice for the period of the new government restriction. Denis Sarana estimated last year possible losses in the ports of the region from the ban on scrap exports of $ 10 million in revenue, exporters themselves - in another $ 30-40 million. A month later, the coastal stevedores estimated the loss from the ban as "about a million tons per year of a stable cargo base for ports "and the drop in their revenues by 700-800 million rubles.

Of course, scrap metal is not the main cargo for the ports of the Far East. According to the Association of Russian Sea Ports (APM), in 2017, the total cargo turnover of the DFO ports in three zones amounted to 192,75 million tons. 63%, or 120,7 million tons, falls on the zone of Primorsky Krai and the Eastern Arctic. According to the Far Eastern Customs Administration, 2017 million tons of ferrous scrap and 1,036 million tons of cargo were exported from the Far Eastern Federal District for 61,16 year. Thus, for tonnage scrap - this is only 0,5% of the total cargo 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 (based on the average annual rate of the dollar in 58,3 rubles - about 10,38 billion rubles), or 0,8% of the $ 22,24 billion declared by exporters. 

However, in the business of individual stevedores, ferrous scrap takes a significant place. For example, one of the largest shippers of scrap metal in the port of Vladivostok is Vladmorrybport. In 2015 the company, according to the latest annual report, handled 289 thousand tons of scrap, in 2016 - 376,7 thousand tons, in 2017 - 408 thousand tons. This is about 40% of the total export of scrap from the Far East. OJSC on 51,9% belongs to Moscow-based Geotex LLC controlled by Singapore's Sparklin Holdings Pte Ltd (formerly the founder of the company was the daughter of the former co-owner of the Evraz holding, Alexander Katunin, Maria Katunina, now on the board of directors of the port), another 20,33% from the Californian Asian Metal Resources Group, the beneficiary of which is Denis Sarana. 
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