Interpipe speaks of a deficit of scrap metal in the domestic market

During the past period of 2015, Ukrainian metallurgical enterprises continue to experience a shortage of ferrous scrap. Thus, the deficit in the supply of this raw material for steel producers amounted to 67,000 tons in April alone, which indicates that supplies are 17 percent lower than needs. At the same time, the export of scrap metal in April amounted to 139,000 tons, which is twice the supply in the domestic market.

According to the Association Metallurgprom and Interpipe, the demand of metallurgists in scrap metal amounted to 383,000 tons in April. Along with the actual delivery volume of 317,000 tons. According to the State Tax Service, the total export of scrap metal from Ukraine in April amounted to 139 thousand tons, in March - 127 thousand tons, in February - 92,000 tons, in January - 47,000 tons. The increased export of raw materials from the country was the main reason for the deficit in the domestic market.

Due to a shortage of scrap metal in April, some steel mills in Ukraine stopped again. For example, Interpipe Steel was idling due to the lack of scrap metal for 7 days. Ukrainian metallurgists have experienced a shortage of scrap metal since the beginning of 2015. From January to March, the shortage of supplies of ferrous scrap amounted to 221,000 tons, or 23 percent of the demand. During the same period, the country exported 266,000 tons of scrap metal, which could fully satisfy the domestic demand of Ukrainian metallurgists.

In general, in the first 4 months of 2015, the deficit reached 288,000 tons with a total export volume of 405,000 tons of scrap metal. Interpipe's Director of Economics and Finance, Morozov, said that "There is a paradoxical situation in which Ukraine provides raw materials for the metallurgical complex of Turkey, while domestic producers who pay taxes to the budget of the country in which they work do not have raw materials for normal functioning of production ".

Despite the current situation, since April 1, Interpipe has increased the wages of workers at its three pipe enterprises to UAH 5266. in April 2015, up 25 percent over the same period last year. “We have found a way to increase the income of our employees, despite the deep recession in the domestic industry,” said Oleg Rosenberg, CEO of Interpipe.