The introduction of a duty of €200/mt will kill the domestic scrap metal market
The situation on the domestic scrap metal market in October deteriorated significantly. After the summer season, negative monthly dynamics is observed. If in August a record of scrap collection of the current year was recorded – 412.5 thousand tons, then in October - one of the worst indicators - 309.3 thousand tons.
The October level of scrap supplies to metallurgical enterprises – 246.4 thousand tons – is the lowest in the current year. Everything is interconnected - in September-October, metallurgical plants reduced their production and began to need less scrap metal.
The metallurgical lobby got the Ministry of Economy to draft a bill to increase the export duty on scrap from the existing €58 to €200 per ton. The logic of such a decision in light of the onset of stagnation in internal scrap collection is not clear.
The following questions arise:
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How are metallurgical plants going to consume the scrap metal that, in their opinion, will be released if the export of raw materials stops?
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After the introduction of a duty of €200 per ton, steel enterprises will sharply smelt more iron and steel? How much?
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Is it true that only the "shortage" of scrap metal previously deterred metallurgists from increasing production at times?
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Now the volume of exports, with which the metallurgical lobby frightened the authorities and the public, is no longer so important. The level of external supplies fell from the record 103.6 thousand tons in July to 45 and 48 thousand tons in September and October. Soon it will probably become zero. As well as investments in scrap collection!
Thanks to exports for 10 months, the industry still demonstrates high indicators:
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scrap collection – + 38.2%, up to 3.44 million tons;
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supplies of scrap metal – + 18.6% to 2.77 million tons.
It is not difficult to predict further developments. Judging by the speed with which the issue of introducing a duty of €200 per ton is being resolved, the positive dynamics of the domestic scrap market is not for long.
The termination of exports means a halt in investment in the scrap collection industry and a sharp decrease in scrap collection. And it may so happen that after the decision to increase the duty has been made, metallurgical plants will no longer have enough of the sharply reduced volume of scrap collection.
