The shortage of scrap in the Ukrainian market gradually increased since the mid 2000-ies. However, after the launch in 2012, industrialist Victor Pinchuk, the electric steel melting complex "dniprosteel", consuming 1 million tonnes of scrap per year, shortage of raw materials was the unprecedented and catastrophic, IA "Free press".
This winter Ukrainian steelmakers are faced with an unprecedented shortage of scrap metal. According to the "Metal-courier" in the first three weeks of January of the enterprise received less than 70% of the planned demand, while total inventories of raw materials (both excluding "Interpipe Nizhnedneprovsk pipe plant) fell to 85 to 90 kt, which corresponds to less than weekly industry need for raw materials. Some businesses scrap reserves are estimated in units of thousands of tons, as a result, they have to increase the share of pig iron in the charge, leading to increased cost.
The metallurgists are not even trying to incentivize suppliers through higher prices, which in the fourth quarter was maintained at about $300 per ton excluding VAT and delivery costs, and only in mid-January added up to $310-315 per ton.
Scrap metal on the Ukrainian market just yet, and take it in the current environment, nowhere.
We can say that the current shortage of scrap Ukraine were long and hard. In 2004 the country scrap collection exceeded 9 million tonnes, of which 2.5 million tons were exported. However, by the middle of the last decade collectors basically picked up stocks of old scrap that had accumulated in the country since Soviet times, and delivery of recyclable materials from metal processing factories decreased due to the decline in the domestic industry. Finally, the transition to the continuous casting of steel, and the closure of several open hearth furnaces led to a decrease in revenue working scrap, which is formed on the steelworks.
Since 2005 the government with the filing of "metallurgical lobby" started consistently "push" exporters of scrap in order to leave a larger volume of raw materials for the domestic steel producers. This purpose, it is "brilliantly" achieved. For 2012 was set an export quota of 900 tons of scrap, but she wasn't even selected half.
In January-November last year, supplies of scrap metal abroad was only 366,5 thousand tons, up 50.3% less than in the same period a year ago. Moreover, in the last few months, export operations virtually ground to a halt. Authorities initially utterly complicated the process of obtaining permits for the sale of scrap metal abroad, and then simply ceased to provide traders with new quotas.
Alas, but more scrap for domestic steelmakers that has not been. According to experts of the state enterprise "ukrpromvneshekspertiza", in the first ten months of last year the Ukrainian steel mills were supplied 4.1 million tons of scrap metal – 28.5% less than in the same period a year earlier. Taking into account exports, fees fell by more than 30%. Meanwhile, the need for Ukrainian steel purchased scrap in 2012 was estimated at 6.5 million tonnes.
A large proportion of the blame for the lack of raw materials is, however, on all the metallurgists. In relations with suppliers of scrap they have until recently been, to put it mildly, very low payment discipline. Long delays in payments for supplied scrap steel the most common. This led to the fact that many independent suppliers of raw materials have been forced to curtail business and personal procurement service of the metallurgical groups, as it turned out, could not fully solve the challenge of metallurgical scrap. This fall metallurgists, recollecting himself, began to reward traders for the timely and complete delivery of the scrap, but as they say, the train has already left.
To compensate for the lack of domestic raw materials through imports, Ukrainian companies are unable. According to "Metal-courier" last year, the country received about 110 thousand tons of scrap, 14% lower than a year earlier. Most of the supplies came from Kazakhstan. Apparently, the Ukrainian steelmakers are unable to offer foreign sellers more favorable terms than their colleagues from Turkey, which is the largest importer of scrap in the world, and Russia.
Further prospects of the Ukrainian market of scrap metal seem to be rather bleak. In November last year, was stopped open-hearth furnace at the plant "Interpipe NTRP", instead of the furnace. The need for scrap is estimated at 1.5 million tons per year, of which about 1.0 million tons the company intends to procure in the domestic market and 0.5 million tonnes to as working scrap, including deliveries from other companies of the group "Interpipe".
In addition, this winter the demand for scrap metal was below normal due to the stop of Donetsk electrometallurgical plant, which actually is the country's largest consumer of raw materials after the "Interpipe NTRP". If the spring, this company will resume, the problem is even more acute.
So this year, and in the future Ukraine will have to increase the import of metal scrap or other raw materials – for example, restored/hot briquetted iron from Russia. At the same time, domestic steel producers, it is difficult to count on significant volumes. Belarus uses internal reserves of scrap completely, and even imports from Russia, Central European countries may not be major suppliers, and Kazakhstan – to significantly expand exports.
Apparently, the Ukrainian steel producers will have to compete for Russian and Romanian scrap with the Turkish companies, which will lead to increase in the cost of raw materials in our country.
However, in this case should increase and fees in Ukraine. The shortage of scrap will weaken if the steelworks will be truly appreciate their suppliers.