Scrap metal deficit in the domestic market in April amounted to 12% of the demand

In April 2016, according to the Metallurgprom Association, the deficit of ferrous scrap in Ukraine amounted to 34 thousand tons, or 12% of the demand of metallurgists in this raw material. Against the background of the scrap deficit, imports of Russian hot briquetted iron (HBI) increased by 9.6 times.

In April 2016, 264 thousand tons of ferrous scrap were delivered to the domestic market. The estimated demand of metallurgists for raw materials this month was 298 thousand tons.Ukrainian enterprises could not fully satisfy it due to export, which, according to the State Fiscal Service, amounted to 83 thousand tons.

The procurement of scrap metal in April 2016 amounted to 346 thousand tons according to the Metallurgprom Association. April 2015 (456 thousand tons), and 23% less than in April 2014 (451 thousand tons).

In January-April 2016, 963 thousand tons of scrap were collected. This is 33% less than in the same period in 2015 (1,443 thousand tons) and 42% less than in the first four months of 2014 (1,654 thousand tons).



The data for 4 months of this year confirm the previously announced forecast of annual harvesting at the level of 2.6 - 2.9 million tons in 2016.

The systematic shortage of scrap metal on the domestic market has led to a sharp increase in imports of HBI, a substitute for this raw material. According to the published data of the State Fiscal Service for 4 months of 2016, HBI imports increased 9.6 times compared to the same period in 2015 - from 2.8 thousand tons to 26.8 thousand tons. HBI is imported from Russia.



“Ukraine stimulates the export of raw materials - scrap metal, while domestic producers of finished products are forced to import a more expensive substitute from Russia,” says Denis Morozov, Interpipe's director of economics and finance. “The obvious result of this economic policy is the creation of additional jobs in Turkey and Russia, and job cuts in Ukraine.”

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Interpipe is a Ukrainian industrial company, a manufacturer of seamless pipes and railway wheels. The Company's products are supplied to more than 80 countries of the world through a network of sales offices located in the key markets of the CIS, the Middle East, North America and Europe. In 2015, Interpipe sold 600 thousand tons of pipe and wheel products.