Scrap metal deficit grows in Ukraine amid record exports

Ukraine continues to strengthen its position as a raw material exporter, while producers of finished steel products are experiencing a shortage of raw materials. The situation with scrap metal for domestic consumption is especially acute, the deficit of which in June amounted to 26 percent of the demand or 100 thousand tons. At the same time, the export of scrap metal reached 230 thousand tons over the same period. The export of this raw material from the country in June reached a record high in the last 10 years.

Almost half of the collected scrap metal is exported. While the approved "Scrap Balance" determines that the share of exports should account for 23 percent, and 77 percent of the procurement of steel scrap should go to domestic consumption.

According to the results for the first half of 2015, the scrap metal deficit amounted to 21 percent or 445 thousand tons, given that exports during this period reached 739 thousand tons. As a result, exports accounted for 31 percent, and only 69 percent of the collected scrap was used for domestic consumption. The bulk of scrap metal from Ukraine is supplied to Turkey.


Turkish steel producers are now provided with Ukrainian raw materials. At the same time, Ukrainian metallurgists are on the verge of stopping, and the export of scrap metal is receiving assistance. Due to a shortage of raw materials, the largest exporter of high value-added products, Interpipe, was forced to stop production in June for 8 days, and during the first six months - for 38 days. INTERPIPE General Director Oleg Rosenberg said: “We miss production deadlines and lose customers. At the same time, the state does not receive additional taxes, jobs are cut. And all together we are losing the future, turning from a high-tech country into a raw material appendage of metallurgists of other countries. "


In such a situation, the government would have to apply quotas to ensure the supply of scrap metal for its own producers. However, the higher price that Turkish metallurgists are willing to pay has become the main reason for the growth of Ukrainian scrap metal exports. At the same time, the interests of domestic metallurgists who are able to ensure the export of finished products are not taken into account.