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Scrap metal collection in Ukraine has dropped sharply

Ukraine

The decrease in scrap metal collection is directly related to the slowdown in exports, which "sank" by more than 60% in August and September.

Scrap metal collection in Ukraine has dropped sharply

In September, the monthly dynamics of the main indicators of the scrap collection industry deteriorated sharply: the reduction in the collection of scrap metal amounted to 9.7% - to 372.7 thousand tons, the supply of scrap metal to metallurgical enterprises decreased by 3.2% - to 308.1 thousand tons. tons.

Warmed up by export opportunities, the Ukrainian scrap metal market began to cool down sharply after August, when there were record rates since the beginning of the year for scrap collection (412.5 thousand tons) and deliveries to factories (318.2 thousand tons).

Nevertheless, over the three quarters from the beginning of the year, the main indicators of the scrap collection industry compared to the same period increased by 43.1% in the procurement of scrap metal, to 3.13 million tons and in the supply of scrap to factories - by 22.7 %, up to 2.53 million tons.

At the same time, there was a further decline in the dynamics of exports of scrap metal. The decrease in external supplies in August amounted to 27% - to 76 thousand tons, and in September exports fell by another 40.7%, to 45 thousand tons.

A sharp slowdown in export dynamics is associated with the stabilization of world prices, which made external supplies of scrap less economically viable. Over the past month, scrap metal quotes remained virtually unchanged in a narrow price range.

“The prospects for the development of the scrap collection industry are significantly deteriorating due to the beginning of a decline in prices in the world steel market and the possible introduction of a ban on the export of scrap until the end of 2022, which is initiated by the Ministry of Economy. This option is no better than what the metallurgical lobby offers - the introduction of a ban on the export of scrap metal until the end of 2023. A ban on exports until the end of next year will quickly lead to a continued decline in scrap collection and supplies to metallurgical enterprises, as well as to stagnation of the scrap collection industry, ”the group of companies noted УКРМЕТ .

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