Ukrainian higher scrap duty discussions increase tension
The €30/mt duty on scrap exports were approved by the Parliament, however, last week president Kuchma suggested a tax rate of €18/mt instead, in order to avoid any possible problems that may come up with the EU. Threats of cutting down Ukraine's quota allocations have been raised by the EU. According to latest reports, Eurofer, the European steel producers association has even suggested canceling the quotas entirely. The president's decision of €18/mt could be overruled if the voting of parliament gathers enough majority, thereafter €30/mt or 30% duty, whichever is higher will be applied. If not, a consultation process will start. Meanwhile the Ukrainian authorities have required the reregistration of all scrap contracts for the fourth quarter of this year. The proposal was aiming to avoid the supply shortage of scrap to the domestic producers as the Ukrainian domestic mills have been suffering huge lack of scrap and high levels of prices in line with the short supply. 2001 Russian imports into the EU were 1.8 million tons, and Ukrainian around 400'000 mts. Furthermore, Turkey is also an importer of Ukrainian scrap with an annual tonnage of approximately 2.5 million tons and Russian scrap of 3-4 million tons, however, due to the decreasing scrap collection in Ukraine, Turkey lately focused on buying from the EU again, resulting in pressuring the EU domestic prices.