The situation on the domestic ferrous scrap market remained stagnant for 10 months. The key indicators of the scrap industry in January–October decreased significantly more than the level of production of metallurgists.
The decline in the main indicators of the industry for 10 months:
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scrap colleclion – by 9.9%, up to 2.49 million tons;
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scrap deliveries – by 9.8%, to 2.34 million tons.
While metallurgical enterprises for the same period reduced production:
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rolled products – at 2.2%, up to 15.2 million tons;
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steel – by 5.3%, up to 17 million tons;
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cast iron – by 1.1%, up to 16.9 million tons.
The intarnatioanal indicators of the industry also remain in complete decline. In 10 months, scrap exports decreased by 20.5% – to 32.4 thousand. tons, imports – by 66.7%, to 15.2 thousand tons. Exports and imports of ferrous scrap in January–October amounted to only $ 8.2 million and $ 17.2 million.
Compared with prices in July and mid–August, which were at the level of UAH 4400–4800/mt the current figure of UAH 5700/mt looks better, but not enough to increase the branch.
To some extent, the simplification of the procedure for selling scrap of Ukrzaliznytsia may change the situation with scrap collection. This decision was made by the government in late October. According to some estimates, Ukrzaliznytsia can potentially sell about 300 thousand tonss of scrap per year.
A significant improvement in the situation on the domestic market is possible only after the stabilization of the situation on the world steel market, an increase in demand for raw materials from metallurgical enterprises and the abolition of export duties. The law №1455-VIII, which establishes this duty, expires in the summer of 2021.
This will allow to export raw materials at $60-70 per ton more expensive than domestic prices. The largest regional consumer of scrap – Turkey – even in a world crisis is not slowing down. In January–September, Turkey increased scrap imports by 15% to 16.2 million tons. Although the country imported the bulk from the EU (61% of the total; 9.9 million tons), the share of raw materials from the post–Soviet space remains significant – 1.8 million tons in the first 9 months of this year.
It is expected that by the end of 2020 scrap colleclion in Ukraine will amount to 2.8 million tons, scrap supplies – 2.85 million tons.
