Duty continues to slash Ukrainian scrap exports

Posted on 11 March 2019

Source: Kallanish

Ukrainian ferrous scrap exports plummeted to just 11,392 tonnes in January-February, compared to 86,448t in the corresponding period of 2018, Kallanish learns from the country's treasury. February exports amounted to just 3,000t.

The exports continue to fall on the back of the implementation of a €42/tonne ($47.2/t) export duty in July 2018, which is due to increase to €58/t and be prolonged by two years in September, when the current duty expires (see Kallanish 1 March). This must first be approved by the country's president. The duty was applied in order to secure sufficient scrap supply for Ukrainian mills.

Turkey remained the largest two-month buyer of Ukrainian scrap with a 90% share, followed by Netherlands with 6% and Germany with 2.5%. Revenue generated by exports slumped almost nine-fold to $3.2 million as compared to $28m in 2018, causing much concern for Ukrainian ferrous scrap industry players.

The country's ferrous scrap association, UAVtormet, says export restrictions have not achieved their aim and are likely to harm industry further. It says Ukrainian mills' scrap generation has fallen by -16.8% on-year to 475,000t. According to state-controlled metals association Ukrmetallurgprom, domestic ferrous scrap deliveries to the mills have also fallen to -21% below mills' requirements, to 354,300t. This has forced increased imports, which rose 38% in January-February to 5,325t. 

A group of MPs and ferrous scrap market participants have asked the parliament to reconsider the duty, citing the negative effect on the industry as a whole. Also cited were violation of international trade rules and increasing lack of transparency in Ukrainian steel price formation caused by the duty. 

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