Ukrainian Railways expects to resume scrap sales soon – Chairman of the Board

Ukrainian Railways (UZ) expects to resume sales of steel scrap soon, which were suspended in early fall 2023. This was stated by Oleksandr Pertsovsky, Chairman of the Board of UZ, during the European Business Association’s Infrastructure Day 2024 on November 28, Rail.insider reports.

According to him, the railroad operator has already agreed on all the details with the Ministry of Community and Territorial Development and the Ministry of Finance. At the same time, due to the large volumes of accumulated raw materials, cutting has been suspended until sales resume.

“I think we will unfreeze everything (scrap sales – ed.) in the near future. We have a lot of accumulated scrap. We even stopped cutting it because we couldn’t sell it,” Pertsovsky said.

Regarding the exact timing of the resumption of sales of raw materials, the Chairman of the Board of UZ said that the company would provide all the regulations within two weeks and would continue its regulatory work with the support of specialized enterprises.

Ukrainian Railways has not been selling scrap metal to the domestic market of Ukraine through auctions in the Prozorro.Sale system for more than a year. The last time the raw materials were put up for auction was in September 2023.

As UZ is the largest state-owned scrap generating company with annual sales of around 10-13% of domestic consumption of raw materials, the prolonged lack of sales poses a real threat to Ukraine’s steelmakers, who are gradually increasing steel production. In 2023, the company sold only 76.4 thousand tons, while in 2022 it sold 113 thousand tons against the target of 170 thousand tons.

As a reminder, in the first half of 2024, scrap collection in Ukraine increased by 62% y/y – to 860 kt. Raw material supplies to domestic consumers amounted to 687 thousand tons (+66% y/y), while exports amounted to 124.5 thousand tons (+35.3% y/y). Steel production in January-June increased by 37% y/y – to 3.87 million tons.