Ukraine hopes to raise export duty on scrap metal again

The Ukrainian parliament (Rada) is working on legislation that will lead to another increase in the export duty on scrap metal.

The Committee presented a proposal to increase the current duty from € 42 /tonne ($ 47.7 /tonne) to € 58 /tonne and to extend it for another three years from September 2019. This means that the current duty, which is to be charged from May 2018, an increase from € 30 /tonne, first introduced in August 2017, must expire.

The upward scale of the export duty on waste reflects the downward scale on which the duty was slowly withdrawn earlier. This became the only bone of contention in Ukraine's accession to the World Trade Organization in the spring of 2008. At the time, the country, after much deliberation, agreed to cut an export duty of € 30 /tonne on ferrous scrap, mainly at the urging of the European Commission.

Subsequent changes in world trade after the global economic crisis of 2008-2009. And unprecedented changes in the geopolitical structure of the country led to the fact that domestic steel mills were limited or even deprived of the supply of scrap metal. Some factories claimed that they had to import scrap in order to continue working, especially those that were fully operational. Finally, lobbying led to the re-imposition of the export duty in 2017.

Since then, the country's factories have produced about 42 million tons of steel, using 6.5 million tons of ferrous scrap. Meanwhile, the country's scrap exports declined in the third year to 327,547 thousand tonnes in 2018, generating $ 105.7 million in revenue, down 13.3% from the previous year, despite rising global scrap prices. ... Collection of ferrous scrap also fell -2% to 3.7 million tonnes, as some scrap metal companies warn against the reintroduction of the export duty.

Meanwhile, shipments of domestic scrap metal to steel mills rose 3% year-on-year to 3.3 million tonnes in 2018. However, this is still 1% below the actual needs of the steel mills. Meanwhile, exports of scrap metal rose again by 67.1% to 42,623 tons.