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Russia can become scrap importer

It is reported that last week the 5th International Seminar “Ferrous and Non-Ferrous Scrap Metal Market 2009” passed in Moscow. The forum participants noticed that due to the decrease of Russian metallurgy output volumes and the demand for raw materials and semis, this industry can become ferrous and non-ferrous scrap importer from North Europe.

According to the opinion of the CEO of Rusmet.ru, Mr Victor Kovshevny, Mr Victor Makushin president of MAIR Group and many other forum participants, due to high dispersion of metallurgical plants on the territory of Russia metallurgical plants located in the western and northern-western parts of Russia would rather import scrap from neighboring Northern Europe. The majority of iron ore and metallurgical plants are on the edge of closing there including the plants of the “core” of European metallurgy since 20th century which is Ellivare-Kiruna metallurgical complex in Northern Sweden.

Northern European scrap and semis do not find needed demand neither in the region nor in Europe despite they get cheaper fast. Regarding Russian scrap, the demand in Europe drop due to the crisis. Scrap suppliers, trying to turn scrap export to domestic market, intend to compensate the losses by raising Russian domestic market prices. By the end of February the scrap from Northern Europe occurred to be cheaper than Russian scrap by 15% and more.

The slump in Russian metallurgy is forecasted min 25%. The situation in Tubes and pipes rolling industry can become a little better due to construction of new pipelines. But the drop here also began to drop last months. According top the words of the Executive Director of Vyksa Machine Building Plant, Mr Vladimir Kochetkov, the market of large diameter pipes shrieked in Russi by 42%.

It was noticed at the forum that production diversification and maximal raw materials and semis cheapening are the main goals of the industry which can be reached by its supplies with cheap scrap products. But in this sector the competition from Northern Europe develops quite successfully.

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