On March 21, 2014, a decree of the Ministry of Transport came into force, according to which the transportation of scrap metal in gondola cars with hatches is possible only after the bottom and roof of the gondola car are covered with wooden shields. This follows from a telegram from Russian Railways sent to shippers in Perm Krai. The decree of the Ministry of Transport was issued back in September 2013, but, as it turned out, its implementation created problems for metallurgists.

Even now, the Sverdlovsk and Northern Railways refuse to let trains with scrap metal through without equipped wagons, says a representative of Russian Steel. "If the ministry's order is not suspended, wagons with scrap metal will soon be at a standstill all over Russia," he says. According to rough estimates by Russian Steel, additional expenses for metallurgical companies could amount to 11 billion rubles; up to 16 million tons of scrap metal are transported by rail annually (total consumption is 25 million tons).

In his letter to Deputy Minister of Transport Alexey Sambuev, Vice President of Russian Steel Igor Khoroshy (Vedomosti has a copy of the letter) writes that the law currently “lacks established requirements for the shields and the technology for their installation,” “installation of the shields, due to the specific nature of the process, cannot be mechanized and will require a significant increase in manual labor.” The estimated cost of additional material costs for the shields and their installation is estimated at 45,000 rubles, or from 700 rubles ($20) per 1 ton of scrap metal. The average cost of a metal blank (in the production of which scrap metal is used) is $400 per 1 ton, an increase in cost by $20 can reduce profits, explains an employee of one of the metallurgical companies. According to Metal-Courier, export prices for square billets have fallen by 6.9% since the beginning of 2013, from $540 to $503 per ton.

Khoroshy asks to cancel the resolution. The Ministry of Transport is considering the appeal of Russian Steel, says a representative of the ministry. Representatives of Mechel, NLMK, Severstal declined to comment, representatives of MMK and Evraz did not answer questions from Vedomosti

The Ministry of Transport is introducing new standards for the transportation of scrap metal to ensure the safety of train traffic and the safety of cargo, says a representative of the Ministry of Transport. A representative of Russian Railways explains that there have been cases on the railways when people tried to steal scrap metal from cars; to do this, the criminals opened the lower hatches of gondola cars, from which the cargo spilled out. "Then we had to compensate the metallurgical companies for their losses," complains the representative of Russian Railways. He found it difficult to name the amount of compensation.

"Covering the wagon with wooden panels is the simplest way to solve the problem, it ensures traffic safety and preserves the cargo," he says. The initiative could also harm Russian Railways itself - there is a possibility that metallurgists will be forced to switch to transporting scrap by road, warns an employee of a metallurgical company.

Scrap without plywood won't go