New rules for scrap handling in Russia come into force

Since October this year, new rules have come into force on the scrap market in Russia: cashless payment is mandatory. There will be no exceptions - it will be impossible to pay for any scrap in cash. Scrap collectors must ensure that the metal can be delivered using reverse acquiring: the money is debited from the company's current account and credited to the scrap dealer's account, the rating agency Rusmet reported.

Requirements for scrap handling are approved by Federal Law No. 89-FZ "On Production and Consumption Waste" dated June 24, 1998. This law, namely Article 13.1, was amended by Federal Law No. 304. A new requirement was added: "From October 1, 2023, payment of money to an individual selling scrap and waste of non-ferrous and ferrous metals shall be made in a cashless manner."

In the first half of 2023, scrap collection in Russia grew by 6% year on year to 11.2 million tonnes. Scrap consumption remained flat at 10.2 million tonnes. In H1, scrap exports also increased: 73% more scrap was exported outside the Eurasian Economic Union (EAEU) year on year, 143% more scrap was exported to Belarus and Kazakhstan. It should be reminded that last year scrap metal exports from Russia reached a historically low level, falling 8.4 times to 384,000 tonnes.

Taking into account the sanctions, export ban, and without reforming the personal income tax, scrap collection in Russia will not recover until 2030, according to Viktor Kovshevny, director of the National Recycling Association RUSLOM.COM, who presented scenarios for the industry's development.

According to his estimates, in 2025, scrap collection in Russia may amount to about 24.7 million tonnes, and in 2030 it will increase to 30.6 million tonnes. He stressed that with the complete abolition of personal income tax, the collection of scrap metal by individuals can also grow by 15-20%, and the transparency of the industry will increase to a large extent (taking into account the law on non-cash settlements in scrap turnover and control by banks of both scrap collectors and individuals).

Edited by Zhenqi Yang, yangzhenqi@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.