Largest Russian Lead Plant Suspends Work Due To Impossibility Of Export

Fregat, the largest Russian secondary lead plant, located in the Moscow region, has suspended work for a month. The Russian Ministry of Industry and Trade did not issue a license for it to export lead, and domestic demand for it is extremely low. It is reported by Economic Pravda with reference to Kommersant.

It is noted that other lead plants may close for the same reasons.

Fregat produces about a quarter of the lead production in Russia, up to 40,000 tons of lead and alloys per year. In the five months of 2022, the plant produced about 17,500 tons.

"Manufacturers receive a license to export raw metal from May 15 to November 15. According to the interlocutors of the newspaper, the Ministry of Industry and Trade wanted to defeat artisanal processors of old lead-acid batteries (raw materials for the production of secondary lead) through licensing, but its requirements for suppliers were excessive," the article says.

It is noted that the supplier must provide a license for the collection, disposal, processing and neutralization of used lead-acid batteries, but the plant cannot have a license for all types of activities with used lead-acid batteries.

In early June, it was reported that Russian lead factories were on the verge of closure due to a complete shutdown of exports.

The European market has not been available due to sanctions since March, and for other areas a license from the Ministry of Industry and Trade of the Russian Federation is needed, which it does not issue.

From July 10, lead supplies will be banned under the fifth EU sanctions package.

The Russian government said in June that export licensing "is aimed at preventing lead shortages in the Russian Federation under external restrictions."

Fregat reported that it had suspended work for one month. During this time, the plant will study the licensing situation and will look for sales markets. The plant employs 227 people, they will be paid two-thirds of the salary. The company's revenue in 2021 amounted to RUB 7.54 billion, profit - RUB 99.7 million.

It is noted that the Ministry of Industry and Trade offered Russian factories to look for new partners "among friendly countries," but without an export license and without understanding the date and volume of supply, it is pointless to negotiate with new buyers, market participants say.

According to experts, Turkey (about 7.5% of Russian exports in 2021), China and Hong Kong (4.2%), Serbia (1.9%) can become promising export directions.

As Ukrainian News Agency earlier reported, on March 5, the PayPal payment system stopped working in Russia.

International photo bank Depositphotos and online graphic editor VistaCreate suspended work in Russia and Belarus due to the invasion of Ukraine.

Google also stopped selling online advertising in Russia. It concerns a search service, YouTube and external partners.

Earlier it was reported that the Starbucks coffee chain announced on May 23 that it was leaving the Russian market.