Ukraine’s Ferrous Scrap Local Supply Fell Short of Steelmakers' Demand

SEATTLE (Scrap Monster): The most recent industrial data published by Ukrmetallurgprom suggests that domestic shipments of ferrous scrap have failed to meet steelmaker’s requirement in Ukraine in the initial seven-month period of the current year. This is despite massive drop in ferrous scrap metal exports out of the country, in the wake of higher scrap export duty by the Ukranian government. Incidentally, the export duty is set to increase from current levels of € 42 per tonne to € 58 per tonne effective Sep 1, 2019.

According to data, home-sourced scrap supply totaled 192,000 tonnes in the month of July this year. This is sharply lower by 41% when compared with the prior month. The supply fell short of steelmakers’ requirement by 4%. Consequently, steelmakers’ stock levels have dropped by almost 32% to 150,000 tonnes on 31^st July, 2019.

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The domestic scrap shipments totaled 1.88 million tonnes in the seven-month period from January to July this year, down marginally by 1% upon comparison with the corresponding period a year before. Also, the supply was less than demand by almost 1%.

As per market participants, the export prices of scrap into the EU, Turkey and Russia were more than those offered by domestic steel producers, thus forcing scrap collectors and suppliers to export the material rather than supplying it top domestic mills at cheaper rate.

The Ukranian scrap collection too recorded notable decline in Jan-July ’19, primarily attributed to decline in domestic scrap prices. The collection was down by 12% year-on-year to total 1.92 million tonnes.