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According to the forecast of the Russian Waste Recycling Association, the consumption of steel waste in Russia may further decrease by 2025. The report points out that the decline in scrap steel consumption is mainly affected by the following A299 Grade B steel factors: export restrictions on scrap steel, high loan interest rates, increased use of scrap steel substitutes such as pig iron and hot pressed iron ore (HBI) in steel smelting, and weak domestic steel demand.
A spokesperson for the association stated that it is expected that the Russian central bank may lower the current key interest rate of 21%, and if steel consumption rebounds, domestic demand for scrap steel may recover to 15 million tons. However, if the key interest rate continues to remain at 21% and steel mills continue to replace scrap steel with pig iron and HBI, scrap steel consumption may decrease to 12.6 million tons.
In 2024, the consumption of scrap steel in Russia A299 Grade B steel decreased by 21% year-on-year, reaching 17.75 million tons, the lowest level since 2009. At that time, the consumption of scrap steel had dropped to 16.95 million tons.
In response to the decrease in domestic scrap steel collection, the Russian Waste Recycling Association has called on the government to increase the export quota for low tax scrap steel from 1.15 million tons last year to 2.3 million tons. Although the government ultimately increased this year's quota to 1.5 million tons, any excess will face a 5% tariff and not less than 15 euros per ton. Scrap steel exports exceeding the quota will be subject to a 5% tax rate, with a minimum of 290 euros per ton. In the current economic environment, the demand for scrap steel faces multiple challenges, and market changes and policy adjustments will have a significant impact on the future consumption trend of A299 Grade B steel waste.
