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Estimate of scrap reserves and key scrap generation sources

In 2013, Metal Expert Consulting examined dynamics of changes in scrap reserves in Russia and determined scrap generation sources and trends.

Russia’s scrap reserves total 1,534 mt to date, Metal Expert Consulting estimates.

The main conclusions resulting from assessment of changes in the above indicator as well as in generation and collection of obsolete and "hidden" scrap are as follows:

– between 1992 and 2002, obsolete scrap generation in Russia was 2-5 mt above its domestic and export shipments, which is why scrap reserves increased from 1,500 mt to 1,560 mt;

– during 2004-2008, on the contrary, scrap collection was above generation, so the reserves dropped to 1,525 mt;

– since 2009, there has been hardly any gap between generation and collection of the obsolete material, and the reserves have stabilized at 1,530-1,535 mt.

Obsolete scrap traditionally has the biggest share in the generation structure. However, a trend towards a slow decline in obsolete scrap generation has been detected. Generation of this scrap is not expected to bottom out even in the five years to come.

New scrap generation in Russia accounts for about 12% of apparent finished steel consumption (products to go through further processing are not taken into account) in the country. Its share in the scrap collection structure has been rising fast in the recent decade.

Dynamics of obsolete scrap generation depend strongly on BOF steel output, semi-finished steel and flat steel production – the main generation constituents for obsolete scrap.

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