Ukrainian metallurgists want cheap scrap metal

Metallurgical companies of Ukraine demand from the government to limit the export of ferrous metals or to increase the export duty.

Rostislav Shurma, general director of the Zaporizhstal metallurgical plant, said on Friday that the government should create conditions under which 95 - 98 percent of all scrap metal collected in the country will be supplied to domestic plants.

ArcelorMittal Kryvyi Rih, the largest metallurgical enterprise in Ukraine, announced its support for such measures.

“We also support restricting the export of scrap from Ukraine, since scrap collection in Ukraine does not meet the needs of metallurgical enterprises,” the press service of the plant says in response to a request from Delo.UA.

Earlier, the need to introduce restrictive measures on the ferrous scrap market was announced by the Interpipe company, the Metallurgprom association and the Federation of Metallurgists of Ukraine.

Nevertheless, market participants say that Ukrainian metallurgical enterprises receive scrap metal today much cheaper than the market price and note that the introduction of additional restrictions to the existing ones will contradict the WTO rules and will allow metallurgists to buy scrap metal on their own terms at low prices.

Scrap collectors reminded metallurgists that in Ukraine there is an import duty on scrap metal in the amount of 5 percent, the cancellation of which they would have to seek first of all.

On August 7, the branch association Metallurgprom and the association of pipe enterprises of Ukraine Ukrtruboprom sent a letter to Prime Minister Arseniy Yatsenyuk, in which they noted a sharp deterioration in the supply of scrap ferrous metals to metallurgical enterprises and asked the government for help in solving this problem.

A month later, Yatsenyuk ordered to urgently make proposals to normalize the situation with the provision of metallurgical enterprises of the country with scrap of ferrous metals. Minister of Economic Development and Trade Aivaras Abromavicius was appointed responsible.

According to the State Statistics Service of Ukraine, in January - August 2015, the export of ferrous scrap from the country increased by 56 percent compared to the same period in 2014 - up to 992,853 thousand tons.