The extension of duties on the export of scrap metal will cause further degradation and curtailment of business activity in the scrap procurement industries, stated President of the Ukrainian Association of Secondary Metals (UAVtormet) Volodymyr Bubliy.
"We are preparing for a further reduction in procurement volumes, a decrease in business activity and a reduction in the number of jobs," says V. Bubliy in comments to the bill registered in the Verkhovna Rada, which provides for the extension of the export duty on scrap metal in the amount of 58.0 euros per ton for another 5 years.
“All the arguments about the extension of the duty period are not about development, which provides for an increase in steel production, but because of this, the consumption of scrap metal, not about the protection of the national producer through protectionism in the domestic and foreign markets, not about fair market pricing , without which both private and state-owned enterprises, which generate scrap metal, suffer. It is about maintaining the status quo, that is, about further degradation and curtailment of business activity in the scrap-collecting industry, ”says the head of UAVtormet.
As an argument for his words, he cited data on the ferrous metallurgy of Ukraine, indicating the stagnation of the industry over the 5 years during which export duties on the export of scrap are in effect and are constantly increasing:
- Steel production decreased by 2.5 million tonnes;
- Procurement of scrap metal decreased by 1.5 million tons;
- Consumption of scrap metal by metallurgists decreased by 164 thousand tons;
- The utilization rate of scrap metal remained at the level of 130-140 kg /t;
- Budget revenues from export duty on scrap metal decreased by 10.1 million euros;
- The number of employees in the collection and processing of scrap metal decreased by 12 thousand people;
- Pig iron exports increased by 1.0 million tons;
- Iron ore exports increased by 600 thousand tons;
- Exports of scrap metal decreased by 1.16 million tons.
Oleksandr Kalenkov, president of the Ukrmetallurgprom enterprise association, expressed the opposite opinion last week, stating that the extension of the duty on the export of scrap metal would help Ukrainian metallurgists withstand the crisis, and this decision does not contradict Ukraine's international obligations.
"One ton of scrap, which is processed into steel and exported already in the form of steel, brings to the country's budget ten times more money than the same scrap that is simply exported abroad," said A. Kalenkov.
He stressed: at present, a number of countries are restricting the export of scrap to protect their producer. And similar actions of Ukraine will not contradict our international obligations, in particular within the framework of the WTO.
Earlier, MP Sergei Magera said that the government should extend duties on the export of scrap metal, otherwise domestic metallurgists will face a shortage of raw materials.
Recall that on March 1, the Verkhovna Rada registered a draft law "On Amendments to Section II" Final and Transitional Provisions of the Law of Ukraine "On Amendments to Certain Laws of Ukraine Concerning Reducing the Deficit of Ferrous Scrap on the Domestic Market" (No. 5175), which are proposed to extend the export duty on scrap metal for 5 years.