The cost of a ton of scrap metal in Russia has decreased to 15,250 rubles — the lowest in the last five years, according to the Rusmet agency. Prices have fallen below the break-even point for many companies involved in scrap collection and processing.
The reason is a sharp reduction in the production of electric steel, where scrap is used as the main raw material. Demand for construction rolled products, for which scrap is mainly re-melted, has fallen by 15–20%, especially in the regions. Because of this, metallurgical enterprises are reducing purchases, and scrap processors are reducing volumes or closing down altogether.
Even subsidiaries of metallurgical plants have begun to look for orders on the side, said Viktor Kovshevny, director of Ruslom.com. According to him, it is not uncommon for payment for supplied scrap to be delayed by 6–9 months.
At the end of the year, according to experts, scrap collection volumes may decrease by almost a third, and electric steel production by 20%.
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