Ukraine may face large scrap deficit

Ukraine may face 1.5 million metric tons of scrap shortage by 2012, the Deputy Minister of the country's Ministry of Industrial Policy Mr. D. Kolesnikov has stated. According to Mr. Kolesnikov, the scarcity of this raw material in the Ukrainian domestic market may occur mainly due to the construction of new mini-mills. Mr. Kolesnikov emphasized that the Ministry is particularly worried about the fact that usually mini-mills are built to use scrap as a primary raw material for steel production. He estimates that for a yearly production of 1.8 million metric tons of crude steel a new mini-mill will need at least two million metric tons of scrap, since one metric tons of crude steel in EAF requires 1.072-1.085 metric tons of scrap. However, looking at the downward trend in scrap collection in Ukraine for the last couple of years (in 2005 – 9.2 million metric tons, in 2006-7.7 million metric tons) clearly these new mini-mills will not have enough scrap to operate.