The community of independent consultants in mineral resources, mining, metal, and chemical industries in the CIS

Publications

За годы работы в отрасли аналитической отчетности, наши сотрудники накопили богатый опыт, которым с удовольствием делятся с читателями профильных изданий. 

    Contact us

    +7 495 988-1-123
    Monday - Friday 10:00 - 19:00 (MSK)

    Order research

    If you need to research on a new topic, please fill out this form, and send the request attach this form.

    News

    14 July 2017
    The company's results in the 1st half of 2017
    In the 1st half of 2017 company INFOMINE Research Group Ltd. done more than 30 reports. In general, the market for marketing research of industrial products is characterized by some revival in...
    15 June 2017
    Market Research News
    INFOMINE Research Group presented a review of the market of finished marketing research of industrial products in Russia, based on its article Qualitative research or announcements and...
    06 June 2017
    Participation in the conference
    The general director of the company Igor Petrov presented report "Enrichment of Mineral Raw Materials in Russia - Implemented and New Projects, Ore Processing Technologies" at a...
    25 May 2017
    Participation in the conferences
    Head of the Department of the markets for chemical and petrochemical products Olga Voloshina presented report "The review of the market of greases in Russia" at the V International...
    06 March 2017
    Participation in the conferences
    General Director Igor Petrov  presented report "Beneficiation plant Russia and the use of flotation in ore processing technology" at the 2nd International conference "Flotation...
    All news

    We accept

    Secondary aluminium in Russia - current trends in supply and demand

    2003

    The Russian secondary aluminium industry is currently at a crucial stage. To understand the present trends, it is necessary to go back to 1992. It was in this year that Russia became an independent state, the outcome of the breakup of the USSR. As a result, the relevant statistics became readily available. Before that date, the major amount of production and consumption of secondary aluminium took place within the Russian Federation.

    In analysing the figures, it will be seen that prior to 1995, the output of secondary aluminium was falling. This was due to the general stale of Russian industry and a lack, as far as most companies were concerned, of fluid capital.

    From 1995 onwards, the trend was reversed, growth having been particularly notable since 1999. This was caused by the imposition of export duties on aluminium scrap and dross. Secondary aluminium production peaked in 2000 when the total output reached 580,000 tonnes. Last year, production fell as a result of a shortage of raw materials. About 90% of secondary aluminium is exported, mainly to the USA, Japan and Germany.

    The main areas where secondary aluminium production facilitates are to be found are Moscow and its vicinity, the Urals (the Yekaterinburg and Perm regions), the Region of Samara and in St. Petersburg and the surrounding area. All are located close to the necessary aluminium and semis processing facilities and within areas in which there is a high demand for aluminium-containing goods. 

    Classes of producer

    There are over 150 secondary aluminium producers in Russia, each of which are likely to fall into one of three groups: The first group includes those facilities originally forming pan of the State-owned Vtorisvetmet concern. Lack of available assets and intense competition for scrap has meant that the capacities of these plants have been under-utilised in recent years. The number of companies active in the production of secondary aluminium relative to the number of organisations producing aluminium as a part of their production programme has been continually diminishing - down from 80% in 1992 to only 30 - 35% at the moment. Major companies in the Group are the Podolsk Non-Ferrous Metals Plant in the Moscow region; the Sukhoy Log Secondary Base Metals Plant based in Sverdlovsk oblast near the city of Yekaterinburg; Permtsvetmet in Perm, and the Mtsesk Plant in the region of Orel. This latter concern was divided into two companies in 2000. One of them was incorporated into the JSC Podolsky Plant of Non-Ferrous Metals. Production figures for 2001 were: The Podolsky Plant, 51,700 tonnes; the Sukhoy Log Plant, 32,500 tonnes, and Permtsvetmet, 35,000 tonnes.

    The second group is occupied by the metallurgical enterprises, for example: The Samara Metallurgical Plant in Samara; Belaya Kalitva Industrial Corporation in the Rostov region; Krasnoyask Metallurgical Plant in Krasnoyask; The Stupino Metallurgical Plant in the Moscow region, and Kamensk Uralsky Metallurgical Plant in Sverdlovsk oblast near Yekaterinburg. These enterprises produce rolled aluminium and therefore operate smelting shops. Because such facilities are often underutilised, the companies can manufacture secondary alloys. The firms also use scrap directly in the production of rolled aluminium stock.

    The third group is made up of over 100 new companies. These firms were set up largely within the last five years as traders were forced to transform themselves into manufacturing enterprises, as a result of changes in the export situation. Most of the companies operate small plants with a capacity of 100 to 2,000 tonnes per month. Typically, such firms rent their facilities from idle engineering companies, foundries or scrap sorting yards. The combined output of these organisations amounts to over 50% of the present-day production of secondary aluminium. In most cases, such companies manufacture lower-grade alloys. However, some of the enterprises operate modern facilities capable of manufacturing high-quality alloys. These include the VMS Plant in Podolsk near Moscow and Tsvetmetobrabotka in the Samara region. The respective output of these plants in 2001 were 21,000 tonnes and 25,000 tonnes.

    Some companies have attracted foreign investment, including Permtsvetmet and VMS. Several joint ventures have also been structured, including the following: Ecomal, based at the Mtsensk Plant, has entered into a venture with Almeta, Austria; Kuusakoski in Vyborg, near St. Petersburg, is participating with a Finnish company; a Japanese company has taken a share in Vostok-Metal in Khabarovsk, and Resal in the Samara region who has entered into an association with a Spanish organisation.

    Of the total output of secondary aluminium, 75% are AK5M2-type alloys and AV87 - AV95 grades ofoxidisers. The alloys are, in the main, produced in the form of slabs weighing 14-16 kg. The explanation behind the production of this range lies with the technical capabilities of many of the recently established plants. A survey of the resources within both old and newly-created facilities reveals that they are often equipped with obsolete reverberatory furnaces fired by gas or liquid fuel. Their capacities range from 1 to 30 tonnes, efficiency is low and fuel consumption and the level of air pollution are high.

    At the end of the 1980's, some of Vtortsvetmet's facilities were upgraded, with the installation of modern equipment and systems provided by Western companies. These included a large scrap crushing plant from Hurnmermills and Lindemann; an Intal chip-drying system; slag processing plant, and other items. However, there have been virtually no upgrading projects since 1990.

    Recently, several plants have commenced production of 5 kg ingots to European standards and 600 kg slabs. The AK5M2 alloy now has a reduced zinc content (<1%) and a lower magnesium level (< 0.5%). Manufacture of deoxidisers in conical and pyramidal form, each weighing less than 1 kg has also commenced. Some facilities are commissioning rotary furnaces for low-grade metal treatment. The highest quality alloys are produced by the Podolsk plant which operates a locally-designed vacuum refining unit and by the Tsvetmetobrabotka Company which has introduced melt refining using an argon and metal filtration process,

    The economic viability of secondary aluminium production was, until recently, the result of low raw material prices. The situation is now changing drastically. Raw material costs are close to the world level. For example, in April of this year, the price of old rolled aluminium in the UK was about US$ 940 per tonne and the cost of scrap cast aluminium US$ 1,000 per tonne. The same prices in Russia were $ 1,040 to 1,240 and $ 1,000 to 1,200, respectively. As a result, any profit is determined by the processing cost. The latter can be reduced by better utilisation of capacity, reduction in melting losses, implementation of new technologies, improvements in quality and reduction in the use of power and fuel.

    Aluminium scrap

    The total arisings of aluminium scrap in Russia was estimated to be 550,000 tonnes in 1992. The amount subsequently fell to some extent, then rose subsequently as a result of the lifting of restrictions on trading in scrap. In 1999, the collection of scrap exceeded one million tonnes. The amount subsequently fell, year on year. In 2001, the arising were 750,000 tonnes.

    Within the last decade, the composition of the scrap collected in Russia has varied significantly. In 1992, the amount of "new" scrap was 72%, made up of 32% of chips and swarf, 30% of croppings and 10% of slag and dross. By 2000, the balance of new scrap had fallen to 15 %, with "old" scrap accounting for the remaining 85%.

    Most of the scrap is used to manufacture secondary aluminium alloys although 20% is used in the production of billet or other material which is subsequently processed into semis or finished products.

    Prior to 1995, the export of aluminium scrap was controlled by the State on the basis of export duties, licensing and a list of designated exporters. This is the reason for data on scrap exports being unavailable up to 1995. Lifting of the restrictions mentioned above led to a sharp rise in exports. These rose in 1999 to a record level of 408,000 tonnes, despite the introduction of 10% duty at the beginning of that year and its subsequent rise to 20% and later that year to 30%. These duties eventually curtailed the amount of material being exported and the introduction of 50% duty in 2000 essentially brought scrap exports to a halt.

    Implementation of these duties was, to a large extent, related to the criminal nature of the scrap trading business over that period. Misappropriations of base metals was rising constantly According to RAO UES, 11,000 tonnes of base metals were stolen during 1999, of which most was aluminium. Most of the stolen scrap was eventually moved outside Russia.

    The imposition of these duties brought relief to those enterprises which had formerly belonged to the Vtortsvetmet concern. These companies had been losing out in competition with the scrap traders and could not obtain sufficient tonnage of raw materials for their plants. Some of these enterprises also exported scrap.

    The introduction of the duties had the effect of stimulating internal scrap processing and led to the establishment of new processing facilities by former trading companies. When Russia enters the WTO, the export duties should be reduced or eliminated, although this step is unlikely to result in a dramatic increase in the export of scrap. The availability of scrap in the country is falling and the existing secondary aluminium plants can process virtually all the arisings.

    The future of secondary aluminium

    The authors would suggest the following scenario for the future of secondary aluminium production in Russia: In the first place, it is certain that the amount of new scrap will rise. Last year's consumption of aluminium and its semis products rose and it would be expected that internal takeup will reach one million tonnes in the near future. Taking into account the utilisation factor, annual production of new scrap is likely to be in the range 120,000 to 200,000 tonnes. Nevertheless, it is important to realise that the greater proportion of new scrap is processed at its point of origin, as for example within rolling mills, cable production facilities and casting plants. Specialised secondary aluminium smelters receive only a small proportion of the arisings of new scrap, mainly in the form of chips and swarf.

    The availability of old scrap is expected to fall, as a result of low aluminium consumption in the 1990's. However, it is necessary to take into account the amount of imported aluminium in the form of packaging, constructional materials, vehicles, etc. The current growth in the consumption of aluminium will take some time to result in a rise in generation of old scrap. On the other hand. there is a fast-growing source of old scrap originating from aluminium packaging, especially in the form of beverage cans. Secondary aluminium producers have a substantial interest in the material. Another prospective source is automobile scrap. Despite the lack of growth in domestic car manufacture, the number of vehicles in Russia has grown yearly by 5% over the last decade, exceeding 25 million automobiles in 2001. The number of cars over 10 years old amounts to more than 50%.

    Last year's increasing volume of drosses. industrial waste and packaging has been absorbed by the secondary aluminium processers. The PK Vtormet Company ha.s commissioned an automobile scrap plant in the Moscow region and there are projects afoot for further facilities of this type. However, recovery of aluminium is not high in such plants, because the attractive price of light-alloy scrap means the parts are salvaged from the vehicles before they reach the scrap recovery yards. In the future, it would be expected that a larger proportion of aluminium scrap will be obtained from such processing facilities. Domestic consumption of secondary alloys accounts for around 10-15 % of the overall utilisation of aluminium in Russia and was estimated to total around 54,000 tonnes in 2001. Major consumers of secondary aluminium are the ferrous metal industry (about 50% of consumption), the automotive sector (35%) and other machine-manufacturing plants (10%). 

    Conclusion

    On the basis of the details outlined above. the following conclusions can be drawn:

    1. Secondary aluminium production will decrease as a result a fall in the level of scrap collection. The balance old and new scrap is also changing.
    2. The reduction in secondary aluminium production and the underulilisation of the existing capacity will increase the domestic cost per tonne. This increase will be further exasperated by rising fuel and power prices and transport costs. As a result it is expected that the number of secondary aluminium smelters will decline.
    3. In order to reduce production costs, the smelters will install new technology. This move will also reduce melting losses and provide a product of improved quality. Major areas of improvement are likely 10 include the use of electromagnetic pumps on furnaces, the adoption of various types of scrap sorters, metal refining and filtration units and dross presses.
    4. It is likely that a larger proportion of the secondary aluminium produced will be in the form of high-grade alloys.
    5. Most of the domestic production of secondary aluminium will continue to be exported. The growth rate of the material's consumption within Russia will be low.




    *The authors are associated with INFOMINE, a Russian private company established in 1993. The organisation is the market research leader for the CIS's metallurgical, oil, chemical and petrochemical industries.

    Dr. M. Burstein and S. Grishaev
    "Aluminium Times", July-August 2003, p.26-27
     

    Coming soon

    September 2017

    Wind Power Plants in the CIS: Production, Market and Forecast

    September 2017

    Kaolin in the CIS: Production, Market and Forecast (8th edition)

    September 2017

    Iodine in the CIS: Production, Market and Forecast (7 edition)

    Agents for the sale of prepared reports

    Яндекс.Метрика

    Pevcheskiy per., 4, bld.4, 5th floor, Moscow, 109028, Russia

    Phone: +7 (495) 988-1-123

    E-mail: info@infomine.ru