Ukrainian steel pipe and railway wheel producer Interpipe has stated that in the current year Ukraine will be a net importer of scrap for the first time ever.
According to Interpipe’s forecast, in Ukraine the situation regarding scrap supply will worsen, with the country expected to collect around 2.9-3.1 million mt of scrap in 2017, decreasing from 3.2 million mt in 2016. In the current year, Ukraine needs four million mt of scrap; thus, the expected scrap shortage in the country will amount to about one million mt. Accordingly, the price of scrap in Ukraine is projected to be higher this year. Interpipe stated that, given the scrap supply shortage, Ukrainian steel producers will compete among themselves for the purchase of scrap and this will be the main factor influencing the price.
Interpipe also stated that the export duty on scrap in Ukraine, which aims at reducing the deficit of scrap in the domestic market and now stands at €30/mt, is scheduled to return to the rate €10/mt in October this year, but steelmakers are expected to support the extension of duties at the rate of €30/mt. Interpipe’s economics and finance director Denis Morozov indicated that the reduction of duty and, as a consequence, the rise in scrap prices in the country, would lead to a deterioration of the competitive positions of Ukrainian metallurgists in the export markets.