JSC "Ukrzaliznytsia" on March 9 held 11 auctions, at which it sold 71.403 thousand tons of steel scrap in the amount of 474 493 thousand hryvnia. As a result of the auction, Metinvest-RESOURCE purchased 33.101 thousand tons of scrap for the amount of UAH 218,553,000, Dneprostal - 28.972 thousand tons for UAH 192,806,000, Energostal - 8.383 thousand tons for UAH 56,367,000, ECOVTORRESOURCES - 0.946 thousand tons in 6,767,000 hryvnia.
The following types of scrap were offered for sale: 1, 4, 500, 501, 510. All auctions were successful, and the average selling price was UAH 6,645 per ton, which is 1.4% more than the average starting price. p>
Most of the lots (9 out of 11) were drawn between Metinvest-RESURS and Dneprostal, where they were the only participants, and the percentage of price growth in these auctions did not exceed 2% (one company took a step at the auction, after which the other company did not raise the price anymore).
Now the stocks of scrap in the warehouses of metallurgical enterprises of Ukraine exceed 200 thousand tons, which allows them to keep domestic prices at a low level. The purchase prices of metallurgical enterprises for scrap are in the range of UAH 6,800 - 6,850 per ton, which is almost 2 times less than the prices at which their Turkish competitors operate.
Analysis of current prices shows the following. The level of prices for scrap metal of type A3 of Russian and Ukrainian origin as of 09.03.2021 amounted to 440 - 445 US dollars per ton with delivery (CFR) to Turkey, and for scrap metal HMS I /II 80:20 - 455 - 460 US dollars per CFR Turkey continues to grow.
At the same time, bringing the prices for scrap metal in international trade to the conditions of the Ukrainian market (taking into account the export duty of 58.00 euros per ton, sea freight (batch of 3000 tons) and transshipment costs) shows that:
- export parity is USD 325 - 330 per ton, CPT composition of the port (excluding the costs of accumulating a shipload in the port)
- import parity is 440 - 445 US dollars per ton, DEQ is the port berth, which, taking into account the NBU exchange rate as of 09.03.2021, is at the level:
- export parity - 9,005 - 9,145 hryvnia per tonne, CPT composition of the port (excluding the costs of accumulating a shipload in the port)
- import parity - 12 300 - 12 435 hryvnia per ton, DEQ port berth.
Considering the unfavorable situation on the domestic market and high prices and further growth of prices for scrap in the export direction, Ukrzaliznytsia should have postponed the sale of scrap or, given the volume of sales, create conditions for the purchase of scrap by exporters.
On March 10, Ukrzaliznytsia JSC will try to sell steel scrap A3 in the amount of 5,108.28 tons (lot 270B) and 4,923.22 tons (lot 271B) at the auction.