Oleksandr Kalenkov: «We reached an understanding on restricting scrap exports from Ukraine in Brussels»

The Ukrainian government’s decision to introduce a “zero” quota on ferrous scrap exports by the end of this year has provoked a very emotional and, as it turns out, completely irrational reaction from Poland. In an interview with GMK Center, Olexander Kalenkov, president of the Ukrmetallurgprom steel association, explains why this measure is critically important for the Ukrainian steel industry during wartime, how it is consistent with European practice, and why Poland’s claims are unfounded given the actual state of the Polish scrap market.

Why was it necessary to introduce zero quotas on scrap exports from Ukraine in 2025?

Scrap exports from Ukraine increased from 50,000 tons in 2022 to 450,000 tons in 2025. Scrap metal collection in the country decreased several times over. This led to a scrap metal shortage in Ukraine, which we estimate at approximately 200,000 tons in 2025.

Ukrainian enterprises received less scrap than they needed. This had a negative impact on both EAF-based enterprises, which use only scrap metal, and enterprises that work with iron ore. Scrap is used in all methods of steel production (open-hearth, converter, and electric arc).

In EAF steelmaking, scrap availability determines production levels, while in open-hearth and BOF processes, it primarily influences production costs, CO₂ emissions, and other environmental performance indicators.

In 2025, steel enterprises produced less steel than they could have. Ukraine lost approximately $700 million in foreign exchange earnings and billions of hryvnia in tax revenues. The losses to the state from the growth in scrap exports are obvious.

To what extent will the temporary restriction on scrap exports from Ukraine help our country and the steel industry in wartime and during the post-war recovery period?

The iron and steel complex is one of the few industries that continues to operate, generate foreign exchange earnings, and provide tax revenues. It is important that it remains operational.

The industry is the main supplier of special steels for the defense industry and steel structures for fortifications. This raises questions not only about the economic but also the physical security of the country, as well as providing the front with everything it needs.

What is the main reason for the sharp outrage of Polish steelmakers over the introduction of zero quotas on scrap exports from Ukraine?

We were surprised not only by the outrage expressed by Polish steelmakers, but also by the arguments they presented. Poland’s scrap market is almost 7 million tons. In 2024, 350,000 tons of scrap were delivered from Ukraine to Poland, which is less than 5% of the Polish market. In 2024, approximately 3 million tons of scrap metal were exported from Poland.

Virtually all Ukrainian scrap metal transited through Poland to avoid paying export duties in Ukraine, and did not remain in Poland. This is easy to track: some of the scrap metal goes directly from Ukraine to the port of Gdańsk, where it is “shuffled.” Ukrainian scrap metal collectors have set up companies in Poland and simply re-export Ukrainian scrap metal to third countries, in particular Turkey.

Are Poland’s claims regarding the threat to competitiveness and increased costs for the Polish steel industry due to the cessation of scrap exports from Ukraine justified?

Polish steelmakers are concerned about possible preferences for Ukrainian steelmakers, but they are probably unaware of the realities facing Ukrainian steelmakers.

The cost of energy in Ukraine is the highest in Europe and significantly exceeds that in Poland. There is constant shelling, electricity is often not supplied to enterprises at all, and logistics costs have increased several times over. The claim that our situation is better than Poland’s is untrue and frankly cynical.

We hoped for solidarity and understanding from Polish steelmakers. Our enterprises operate in much more difficult external conditions. We continue to produce at a loss solely to preserve the industry and ensure supplies for the defense industry.

Is the loss of Ukrainian scrap metal supplies critical for Poland? Is there a shortage of scrap metal on the Polish market?

Poland’s scrap metal market is in surplus. The country generates 3 million tons more scrap than Polish steelmakers actually need. This surplus is exported mainly to Turkey and Germany, as well as other EU countries.

If Poland itself exports seven times more scrap than Ukraine supplies to Poland, it is obvious that it has no particular need for scrap. The claim that scrap exports from Ukraine somehow affect the interests of Polish steelmakers is completely unfounded.

Are prior consultations and a transition period necessary when introducing zero quotas?

Prior consultations with the European Commission have been held. We have been discussing this since at least 2023. Since 2022, scrap exports have grown several times over each year – from 50,000 tons in 2022 to 450,000 tons in 2024.

We have observed that this growth is largely explained by the free trade zone between Ukraine and the EU. Unscrupulous exporters have exploited this arrangement to bypass the €180/ton export duty by routing scrap metal through EU countries, primarily Poland, on its way to Turkey and other destinations, including countries that continue to import Russian energy resources.

We held negotiations with the European Union Delegation to Ukraine, the European Commission Delegation in Brussels, the EU Directorate-General for Trade (DG Trade), and the relevant European association Eurofer. We argued that our desire to limit export growth was not motivated by any prejudice against Europe or European producers, but by the fact that the EU is being used as a loophole to avoid paying customs duties.

If our exporters had paid duties on each ton of scrap in 2024, as required, Ukraine would have received over €80 million. They did not do so. Ukraine suffered twice: it did not receive the duties, lost several billion hryvnia in taxes, and over $700 million in foreign exchange earnings because steelmakers produced less steel than they could have.

The consultations were conducted openly, everyone was informed, and we found understanding on this issue at the level of Brussels and the European Commission. I am sure that Polish producers were also informed about everything.

Are there grounds for Poland to ask the European Commission to intervene? What is the possible outcome?

Brussels and other EU countries have responded to Ukraine’s measures with understanding, considering them logical and justified, with absolutely no impact on the scrap metal balance and stability of the steel industry in both the European Union and Poland.

Everything we supplied to Poland accounted for less than 5% of the Polish scrap metal market. This is a clear form of tax evasion in Ukraine by unscrupulous scrap metal exporters, and it is unclear why Polish steelmakers are reacting this way.

Are Poland’s claims that Ukraine is asking for preferences in the EU by blocking the export of raw materials justified?

Poland’s position remains unclear not only on this issue, but also regarding the export of Ukrainian steel products to the EU. Poland played a significant role in blocking Ukraine’s exclusion from the new trade measures currently being considered by the European Union.

In 2024, Ukraine received an exemption from EU customs duties (so-called safeguard measures) introduced by the European Union in response to Trump’s measures and increased competition in the global market. The EU is currently working on adopting new legislation on trade restrictions. These will be much tougher measures: quotas for all importers of steel products will be halved, and duties will increase from 25% to 50%.

Given that Ukraine has already been exempted from existing safeguard measures, it should logically be excluded from the new ones as well. However, opposition from certain governments, most notably Hungary (under Orbán) and Slovakia (under Fico), has created obstacles. It now appears that Poland has also joined our ill-wishers.

The country has expressed concern about the growth of imports from Ukraine. I would like to remind you that Poland has a positive trade balance with Ukraine. It exports significantly more to Ukraine than it imports. In 2025, imports from Poland to Ukraine amounted to almost $8 billion, while exports from Ukraine to Poland amounted to $5.1 billion.

After losing Pokrovsk, we are buying Polish coking coal and coke. This is a lifeline for the Polish coal industry, which is part of the iron and steel complex and is currently in crisis. If we did not buy Polish coking coal and coke, their mines would shut down and many Polish miners would be left without work.

I was surprised to learn about Poland’s position, which, together with Orbán and Fico, is trying to undermine normal trade relations between Ukraine and the EU regarding rolled steel, and for completely fabricated reasons. Now scrap metal has been added to this, even though it has no negative impact on the Polish steel industry.

Don’t you see double standards in the fact that Poland protects its farmers but demands free exports of scrap metal?

I would not link these aspects together. In my opinion, the European Union and Poland benefit much more from agricultural products, but there it is more of a political issue.

the agricultural sector, where the figures remain subject to debate, this case leaves no room for discussion. The facts are clear: Polish steelmakers are not being harmed by imports of Ukrainian steel products, and even less so by restrictions on scrap exports from Ukraine.

Can the temporary restriction on scrap exports from Ukraine be considered consistent with European practices?

Yes, we are consistent with European practice. The EU plans to restrict scrap metal exports to non-OECD countries from 2027. This is planned and included in the European Steel Action Plan.

Europe is now considering restricting scrap exports from the EU. Europe is one of the few regions that has a significant surplus of scrap metal and exports approximately 20 million tons annually. This is because Europe has a highly developed mechanical engineering, which is the main source of scrap metal.

Even with a significant surplus, Europe is considering restrictions. Already, European scrap collectors can only export scrap to OECD countries. The European Union wants even greater restrictions, as it understands that the role of scrap metal is growing on the path to green steel industry.

Increasing the share of EAF-based steel production and the use of scrap as raw material significantly improves environmental performance and reduces CO2 emissions, which is currently a priority for Europe. Ukraine, as a future member of the European Union, is also moving in this direction.

Can we expect further complications in Ukrainian-Polish trade relations?

I understand that politics is also involved here. Many statements are being made about trade with Ukraine by various political forces. For example, the Confederation and other parties that openly take an anti-Ukrainian position. It will be difficult to engage in dialogue with such opponents, as their position is based not on facts and reality, but on a desire to harm Ukraine.

I believe that most political forces in Poland and Polish businesses understand the reality of the situation and we should be engaging in dialogue with them. We have already sent letters to trade unions, associations, and the Polish media, and we will continue to do so and simply explain our position.

We do not pose a threat to Poland.

If Poland continues to oppose Ukraine’s decision on scrap exports or the import of Ukrainian steel products into the EU, resulting in further harm to our producers, the outcome will be straightforward: we will simply produce less or our enterprises will shut down altogether. We will buy less coke and coking coal from Poland, and it’s important that Polish stakeholders would understand the potential impact on their own economy.

Ukraine, whose economy is largely dependent on the iron and steel complex, will also buy fewer Polish goods. Let me remind you: Poland has a trade surplus with Ukraine, and the Polish iron and steel complex as an industry also receives a surplus from trade with Ukraine.

Poland should be interested in keeping our iron and steel complex running, as well as Ukraine’s economy, because it makes their money based on that activity.

I would like to encourage our Polish colleagues to carefully weigh all the pros and cons as they are, and to verify the accuracy of the data underlying their conclusions. I think that most of the questions will then simply disappear if attitudes towards Ukraine are not clouded by prejudice, as is the case with some politicians.

We intend to continue the dialogue with Polish steelmakers, Polish trade unions, and the Polish government, which is helping Ukraine, to explain and defend our position in a reasoned manner, and I think that all differences will be resolved.

On my own behalf, I would like to invite representatives of Polish trade unions, associations, and unions to come to Ukraine to see for themselves the conditions in which Ukrainian iron and steel companies operate today.