In 2010, Ukraine is expected to increase its scrap exports by 1.9 percent year on year to 0.9 million mt, the Ukrainian Association of Secondary Metals (UAVtormet) said, adding that in 2011 the country's exports may fall if the government cancels the value-added tax (VAT) on scrap transactions.
On September 3 this year, Ukraine's Cabinet of Ministers submitted a revised draft of the Tax Code, which contains a provision for the exemption of operations with ferrous scrap from VAT payment as of January 1 2011.
According to UAVtormet's president Valentin Kulichenko, the temporary exemption of operations with scrap from the VAT was implemented also in 2007-2008, and during this period the market saw stable operations, although export volumes declined.
"I consider that the motivation for scrap export, if there is no compensation, will fall. But the question is whether the domestic market would be able to absorb additional volumes of production," Mr. Kulichenko said.