Due to the significant increase of export from Ukraine of ferrous scrap in the Ukrainian steel industry is in a critical situation that threatens the stable functioning and further development of the industry. This is stated in an open letter to the Federation of metallurgists of Ukraine addressed Prime Minister of Ukraine Arseniy Yatsenyuk, a copy of which Ukrainian news feature.
In particular, the letter reminds that today the metallurgical complex remains the locomotive of the Ukrainian economy, which together with related industries provide employment to about 500 thousand people and generates more than 20% of GDP. About 86% of production of domestic steelmakers exported, allowing you to replenish foreign exchange reserves of the country and to ensure stable revenues to the budgets of all levels.
At the same time, in the first half of 2015, has seriously complicated the situation in the domestic market of scrap metal. According to the Association, Metallurgprom, the shortage of scrap in the domestic market in H1 2015 amounted to 436 thousand tons, with exports of 739 thousand tons. Thus, in recent years, along with traditional consumers of scrap from Ukraine Turkish steelmakers increasing influence on the situation in the scrap market has the position of the Moldovan metallurgical plant (Moms) procurement and pricing of imported scrap.
According to calculations of our experts, for 100% meet the needs of the Ukrainian steelmakers considering the planned increase in production, the volume of export scrap in the second half of 2015 should not exceed 160 thousand tons, or 27 tons per month. We assume that the volume previously agreed, but never used in export contracts is at the level of 200 thousand tons. To stabilize the domestic scrap market it is necessary to suspend the registration of new export contracts, said in the letter.
Steelmakers also remind the Prime Minister that the imposition of restrictions on the export of scrap metal used in many member countries of the WTO. Realizing the strategic value of scrap for domestic production, some States significantly restrict the export of scrap by establishing high duties (for example, Thailand – 50%, Vietnam – 35%, Pakistan – 25%, Iran 30%, Argentina 20%, India 15%, China 10%, Russia – 7.5%) or even completely ban exports (Indonesia, Saudi Arabia, Jamaica, Uruguay, Azerbaijan, Kazakhstan).