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Experts insist on the premature trading of scrap metal by Ukrzaliznytsia

Ukraine

Experts of the state enterprise Derzhzovnishinform note that auctions for the sale of scrap metal by the Ukrainian railway are held at prices almost 2 times lower than those at which Turkish companies buy raw materials.

Experts insist on the premature trading of scrap metal by Ukrzaliznytsia

Taking into account the unfavorable situation on the domestic market and high prices and further growth of prices for scrap in the export direction, Ukrzaliznytsya should have postponed the sale of scrap or, taking into account the volume of sales, create conditions for the purchase of scrap by exporters. About this told experts of the state enterprise "Derzhzovnishinform".

They noted that it is necessary to separately allocate lots in the south of Ukraine, which will reduce the amount of funds required to participate in the auction, and attract more participants, including potential scrap exporters, to increase competition in the auction and, accordingly, increase income for fulfillment of the financial plan of the enterprise.

According to Derzhzovnishinform, today the stocks of scrap in the warehouses of metallurgical enterprises in Ukraine exceed 200 thousand tons, which allows them to keep domestic prices at a low level. The purchase prices of metallurgical enterprises for scrap during the last auction were in the range of 6800-6850 hryvnia per ton, which is almost 2 times less than the prices at which their Turkish competitors buy raw materials.

In the period 09.03.2021-10.03.2021 "Ukrzaliznytsia" held 13 auctions, at which it sold 81,435 thousand tons of steel scrap for the amount of 541,313,000 UAH. As a result of the auction, Metinvest-RESOURCE purchased 38.025 thousand tons of scrap, Dneprostal Iron and Steel Works - 34.081 thousand tons, Energostil Plant - 8.383 thousand tons, ECOVTORRESOURCES - 0.946 thousand tons. All auctions were successful, and the average selling price was UAH 6647 per tonne, which is only 1.35% more than the average starting price.

Derzhzovnishinform experts' analysis of prices as of the date of the auctions shows that the level of prices for scrap metal of type A3 of Russian and Ukrainian origin as of 09.03.2021 amounted to USD 440-445 /ton CFR Turkey, and for scrap metal HMS I /II 80:20 - 455-460 USD /ton CFR Turkey and continues to grow.

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