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Against scrap there are tricks

As scrap exporters try to combat the ban on export of raw materials needed by metallurgists

Exporters of ferrous scrap are threatened with "hunger riots" if a government prohibits the export of scrap through the ports of the Far East. They announced this at a press conference held last week at the site of the "Russia Today" news agency.

Against scrap there are tricks
The press conference was initiated by the National Self-Regulatory Organization of Ferrous and Non-Ferrous Scrap and Waste Recyclers "RUSLOM" and its director Viktor Kovshevny. The event itself was of a closed nature, and the composition of the participants raises a large number of questions. So, in addition to Mr. Kovshevny, the first deputy chairman of the State Duma Committee on Nationalities Valery Rashkin (KPRF), State Duma Deputy Denis Parfenov (KPRF), who previously headed the commission on work with youth at the Moscow City Committee of the KPRF, as well as Tatyana Kostikova, who introduced herself as chairman of the trade union of scrap collectors and scrap processors (officially such an organization does not exist). 

Representatives of the professional community - large scrap collectors, metallurgical plants, the Ministry of Industry and Trade of Russia - were not invited to participate in a press conference on such an important issue. Market participants learned about it from the media. And they were skeptical about loud statements. In particular - the management of the Amurmetal plant.

“The most important thing is to immediately define correctly the concepts of“ scrap collector ”,“ scrap collector ”and“ exporter. ”Scrap collectors and scrap collectors are people and companies working on the ground who, on a daily basis, do the hard work of collecting and procurement of ferrous scrap. they can be compared to speculators. They make money solely on the difference in price. They buy scrap at a lower price, but sell it at a high price. They sell it abroad - to mills from South Korea, which are actually financed by American companies, "says the general director of the plant" Amurmetal "Sergey Kuznetsov.

When exporting raw materials abroad, exporters use gray tax avoidance schemes. Scrap metal from Russia is sold by businessmen at a fictitious cost. According to the Federal Customs Service, only 2016-2017 years from the territory of the Far East were exported 2,13 million tons of ferrous scrap. The average price of declaring 1 tons of scrap exported was $ 166, on average - 9 700 rubles. With a real offer price of $ 293, or 17 600 rubles. (Documents confirming this fact are at the disposal of the editorial staff.)

"Do they do charity work, work at a loss? No. It's just that in official supply contracts, the same amounts are passed, and the difference between the real and the" paper "value is transferred to closed accounts. It is easy to calculate that as a result of such" schemes "the RF budget is missing billions of rubles in the form of lost taxes and duties, and more than 200 million dollars remain in the offshore accounts of exporters annually, "says Sergei Kuznetsov.

Today, according to the analytical publication "Metal Expert", South Korean plants are ready to offer exporters $ 375 per ton of ferrous scrap. At the same time, businessmen, who are ready to sell all raw materials abroad, argue that a ban on the export of scrap is introduced for the sake of the only enterprise in the Far East - the Amurmetall plant. And this is a violation of antitrust laws.

"Scrap is also bought by Evraz, MMK and other metallurgical plants," say the East Siberian Metallurgical Company (part of EvrazHolding LLC). This information is also confirmed by a source in another specialized company, SGMK-Trade, which supplies ferrous scrap to plants in Siberia and the Urals. Thus, according to Russian Railways, in 2017, about 700 thousand tons of scrap were sent to other metallurgical plants from the Far East.

Amurmetal was in a state of crisis for almost 10 years and came out of it only last year. The bankruptcy commissioner, who was preparing the property complex for sale, at that time did not see the future plant and was sure that Amurmetal would again return to bankruptcy in a couple of years. However, within a year the new owner, the Torex group of companies, managed not only to quickly bring the enterprise back to life and resume production, but also to get a 26,4% discount on railroad transportation of scrap metal to the plant.

It should be noted that temporary restrictions on the export of scrap were introduced before this. Almost a year - in 2008, for six months - in 2010. In June 2015-th decree of the government of the Russian Federation, scrap of ferrous metals was recognized as a commodity that is essential for the domestic market. This entitles the federal authorities in exceptional cases to categorically impose restrictions on its exports. Even then, businessmen engaged in this business, opposed this measure and stated that the companies involved in scrap collection would simply close. However, today there are only more of them. According to the very partnership, "Rusl", at the time of the creation of this non-profit structure it included only 6 participants. Today, in the file cabinet (it is freely available on the official website of the partnership) there are already 125 organizations engaged in the collection and procurement of scrap.

In fact, nothing will change for scrap collecting machines and scrapers in the event that a ban on the export of scrap abroad through sea ports will be introduced. Just instead of exporters scrap will be bought by its direct consumers - metallurgical plants that use electric furnaces.

In the group of companies "Toreks" declare: today "Amurmetal" buys a scrap at the market price, as even in its home region is in the conditions of fierce competition for this type of raw materials with other combines, and any attempts to reduce the price below the market will simply lead to, that the entire amount of raw materials needed by the plant will go to other regions.

At a meeting in the government of the Russian Federation, where a decision was made in favor of limiting the removal of scrap, the plant representatives said that if the plant was fully supplied with ferrous scrap, the plant would be able to switch to the 3-x work schedule and, in 2018, recruit more 1200 employees . Annual allocations to the RF budget in the form of taxes, duties and fees will amount to about 2 billion rubles, but most importantly, this is another step in the direction of developing and strengthening non-primary exports from the Russian Federation, which has been repeatedly, including in the last message to the Federal Assembly , said Russian President Vladimir Putin.
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