Operating "Elektrostal" will create problems in the Ukrainian scrap metal market - expert opinion
The commencement of full-fledged operation of the Electrostal metallurgical plant in Kurakhovo (Donetsk region, Ukraine) will mean a sharp increase in the deficit of scrap metal in the domestic market of the country and destabilization of the metallurgical industry. This is stated in article UAprom "Sale of Elektrostal: why Ukrainian metallurgists face a shortage of scrap metal."
As noted in the publication, Donetsk businessman Igor Andreev at the end of autumn 2021 sold idle due to the lack of scrap metal since December last year, Elektrostal of Ukrmet, which has scrap collection sites throughout Ukraine.
“For the full operation of the plant, it will take about 50-60 thousand tons of scrap metal per month. In an annual projection, we reach the figure of 1.1-1.2 million tons (together with exports). There is simply no such additional volume on the Ukrainian market, ”warns Igor Guzhva, head of the analytical center CMD-Ukraine.
According to the data of the Ukrmetallurgprom association of enterprises, for two years in a row, scrap collection in Ukraine updated the anti-record: in 2019 it amounted to 3.1 million tons, in 2020 - 2.9 million tons. In 2021, the situation with scrap procurement stabilized, in 10 months it amounted to 3.2 million tons.
Since the summer, Ukrmetallurgprom has repeatedly appealed to the Ukrainian government to impose a ban on the export of scrap metal. However, the officials were never able to make a decision. As a result, on the eve of a difficult winter period, metallurgists are forced to work virtually “off the wheels”, without strategic reserves.
Recall that restrictions on the export of scrap metal are in effect in one form or another in almost all steel-producing countries. A number of countries completely banned the export of scrap metal last year.
In the Russian Federation, neighboring with Ukraine, export duties on the export of scrap just this year have been raised twice and this week they are again increasing to 100 euros per ton from January 1, 2020.
The EU introduced a de facto manual control of the scrap export ban in November for environmental reasons.