Ukrmetallurgprom predicts a deepening shortage of scrap metal in the 2nd quarter

Metallurgical enterprises of Ukraine began to gradually increase production due to the stabilization of electricity supplies, but they are experiencing difficulties in providing production facilities with the necessary volumes of scrap. The deficit is expected to worsen over the next few months.

In particular, scrap stocks at enterprises have not exceeded 20-25 thousand tons for several months, and in December they were at a critical level of 10-15 thousand tons. 100 thousand tons,” the association noted.

According to the interviewed experts, this situation arose due to a combination of factors. Among them is a natural decrease in procurement due to the occupation of part of the territories in the east and south of Ukraine, which were the main generators of scrap metal due to the developed industry. In addition, the export of scrap metal increased markedly. In January, it amounted to 8.3 thousand tons, and in February it doubled to 15.8 thousand tons. Ukrmetallurgprom predicts that in March this figure may exceed 20 thousand tons. That is, according to the results of the quarter, we will talk about foreign sales levels are over 45 thousand tons. President of Ukrmetallurgprom Alexander Kalenkov recalled that back in the 4th quarter of 2022, 10-15 thousand tons were exported from Ukraine every month. “Therefore, metallurgists have concerns that even with zero exports more tangible in the 2nd quarter of this year,” he noted.

In addition, the shortage of scrap metal is a critical indicator for the stable operation of the Ukrainian metallurgy. “This may lead to the fact that steel companies will not be able to produce additional steel or even reduce production,” said Igor Guzhva, head of CMD Ukraine. “I think that we need to return to the idea of ​​banning the export of scrap metal during hostilities,” he added.