russia’s Waste Recycling Industry Is in Deep Crisis

russian participants in the secondary raw materials market report a decline in revenue, a reduction in collection volumes, and a decrease in demand for recycled materials. January and February were the most difficult months for businesses, when the turnover of many companies fell sharply amid a general decline in economic activity.

According to representatives of the industry, prices for plastic waste have fallen significantly. This was due to the cheapening of primary polymers, particularly against the background of active imports of cheap raw materials from Iran. As a result, recycled plastic is sold at a discount of 30-50% of the price of the primary material, and sometimes does not even cover the cost of processing. Company warehouses are overflowing with unsold products, prompting some companies to consider shutting down this line of business completely.

The scrap metal market is also facing a difficult situation. After the start of the war against Ukraine, russian metallurgists lost a significant part of their foreign markets due to sanctions. Exports of rolled metal have fallen by about 35% since 2021, while domestic metal consumption is also declining due to the downturn in construction and machine building. As a result, scrap metal prices have more than halved, from about 22-24 thousand rubles per ton to about 12 thousand.

Due to declining profitability, many companies are forced to scale back their operations or close down. Some scrap metal collectors have already closed half of their collection points, and there is a flood of offers to sell waste processing equipment on the market.

Market participants also criticize government regulation, which, in their words, creates additional pressure on business. Despite the authorities’ official statements in support of the use of secondary raw materials, manufacturers face numerous inspections and fines for using recycled materials in their products.