Scrap metal deficit in Ukraine may reach 1 million tons in 2017

According to the forecast, in 2017, 2.9 - 3.1 million tons of scrap metal will be procured in Ukraine, which is less than the actual supply to Ukrainian plants in 2016, which amounted to 3.2 million tons. In addition, this is significantly less than the demand in 2017, which, according to Ukrmetallurgprom, will reach 4 million tons. As a result, the estimated deficit of scrap metal in the country in 2017 will amount to 1 million tons.

The decline in scrap procurement is due to the depletion of sources of available scrap. CRU Independent Authority notes that metal consumption in the Ukrainian market has decreased by 95% in comparison with the Soviet period. This means that the formation of new scrap metal practically does not occur. Statistical data on scrap procurement confirms the forecast due to the current trend: in 2000, Ukraine collected 11 million tons, in 2010 - 7 million tons, in 2016 - only 3.5 million tons.

The main event from the point of view of legislative regulation in 2017 will be the development of the situation with the export duty on scrap metal. Now its size is 30 euros per ton. Its one-year term ends in September 2017, after which the duty will return to 10 euros per ton. Metallurgists are interested in extending the duty of 30 euros, otherwise, if the duty is reduced, possible losses will amount to 100 thousand tons of finished product orders in 2017.

The source of the formation of scrap is the growth in the production of engineering products, large projects for the modernization of housing and communal services, pipeline infrastructure and railway rolling stock, which is not expected in the next 5 years, therefore, the procurement of scrap metal is likely to decline.