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According to the latest data released by Russian LR/DH40 steel rating agency Rusmet, as of the week ending June 22, the purchase price of scrap steel in Russia has dropped to 15550 rubles/ton (excluding value-added tax and railway transportation costs, FCA terms), with a weekly decline of 3.12%, the lowest level in three years, seriously threatening the profitability of the entire industry.
According to RUSLOM, the Russian National Association for Renewable Resources, 20-25% of scrap steel recycling companies have exited the market in the past year, and it is expected that this proportion may rise to 30% by the end of 2025. The director of the association, Viktor Kovshevny, warned that many companies are unable to pay wages and have to reduce operations or even shut down. He stated that the current situation is most severe in the export oriented regions, with up to 70% of recycling capacity in the northwest and far east already shut down. The crisis is spreading to Siberia and may further affect the central federal district within the year.
At the same time, the demand for scrap steel in Russia LR/DH40 steel is also shrinking domestically. Data shows that Russia's steel production in May decreased by 4.4% year-on-year to 6 million tons; The cumulative production from January to May 2025 decreased by 5.2% year-on-year to 29.1 million tons. It is expected that the national consumption of scrap steel will decrease to 12.5 million tons by 2025, a decrease of 30% compared to 2024.
To make matters worse, export restrictions have further compressed the survival space of enterprises. In 2025, Russia will implement a 5% (not less than 15 euros/ton) export tax on scrap steel exports within a quota of 1.5 million tons, and a tax of 5% but not less than 290 euros/ton on excess quotas, significantly increasing export costs.
Under dual pressure, the industry is facing a systemic crisis. RUSLOM LR/DH40 steel warns that a large number of small and medium-sized recycling enterprises are losing their last sales channels, and the industry may face a new wave of bankruptcy. Under the current situation, the scrap steel industry calls on the government to introduce more flexible policy support to alleviate the impact of export restrictions and restore the stable operation of the domestic recycling system.
