Ukraine's electric steel smelting plant Electrostal has been forced to temporarily stop production due to high domestic scrap prices, which have increased by 10 percent since the beginning of February this year to UAH 3,300/mt (about $415/mt).
Electrostal said that the production stoppage may last a week or slightly more, until the big steelmaking companies in the region satisfy their need for scrap and until the price of scrap declines.
Meanwhile, according to the Kommersant-Ukraine newspaper, another major scrap consumer in the region Donetsk Electrometallurgical Plant (DEMZ) has reacted to the above situation by starting partial imports of scrap from Kazakhstan.
Citing the Ukrainian association of metal producers Metallurgprom, the newspapert has said that, apart from the mentioned steelmakers, the shortage of scrap is experienced only by ISD's subsidiary Dneprovsky Iron and Steel Works named after F. Dzerzhinsky (DMKD), which aims to solve its scrap problem by switching to alternative raw materials, i.e. hot briquetted iron (HBI), and it has already purchased about 15,000 mt of HBI from Lebedinsky GOK, a subsidiary of Russian steel and iron ore producer Metalloinvest.
By the end of February this year, domestic scrap prices are expected to stabilize, with no further increases forecasted in the near future.