Steelmakers advocate for extension of duty on scrap exports

Ukrainian steelmaking companies advocate for extension of the duty (€58 per ton) on scrap exports.

That was stated by Oleksandr Kalenkov, President of Ukrmetallurgprom, during discussion of the draft National Economic Strategy 2030, dedicated to “Development of industry, transport and infrastructure”.

“Duty on exports of scrap has generated huge fiscal revenues. Budget revenues from processed steel scrap 8.5 times exceeded revenues generated by exports of scrap. In September, the duty on scrap exports expires. We call upon the government to keep the duty on scrap”, said Oleksandr Kalenkov.

To extend the export duty, it is necessary to amend the applicable legislation. Amount (€58 per ton) and period of validity (five years) of the duty on scrap exports are regulated by the Law No. 1455-VIII “On Amending Some Laws of Ukraine Concerning Reduction of Deficit of Ferrous Metals Scrap in the Domestic Market”. The document was signed on 12 July 2016.

“When it was reported that China would resume exports of scrap, many countries began to worry about possible hike in prices for scrap. It is expected that China will import up to 10 million tons of scrap this year, which accounts for 10% of the global trade. So, Ukraine is not the only country in which a dialog around restrictions on scrap exports is going on”, underscores Andrii Tarasenko, GMK Center Chief Analyst.

As reported earlier, in December, Russia imposed a duty on exports of iron-and-steel waste and scrap for a half-year period, which amounted to 5% or €45 per ton, whichever is greater. The above restriction aims at prevention of hikes in prices for construction materials and rolled products. A possibility of imposition of similar restrictions is being considered in the EU.

We remind that in 2020 Ukrainian companies reduced exports of scrap by 15.1% to 35.8 thousand tons. In monetary terms, the above rate dropped by 19.4% to $9.5 million.