Ukraine metals group criticizes scrap export proposal

In an online interview sponsored by the Ukrainian Association of Secondary Metals, Andriy Kiselyov, owner of Ukraine-based UkrMet Holding, says a ferrous scrap export ban being discussed in that nation would temporarily favor three steelmakers while causing long-term damage to the scrap processing and trading sectors.

“The initiative to ban scrap metal exports from Ukraine goes against the World Trade Organization regulations, conditions of the Association Agreement with the European Union and even international practice,” an introduction to the interview states in its opening paragraph.

The introduction also claims scrap exports in the first half of 2021 have not exceeded 10 percent of scrap metal collected. At the same time, the “free sale” of scrap, including in foreign markets, “will not only strengthen Ukraine’s export positions but will also help restore the image of the country “ as one with a market economy and “real investment opportunities” says the article.

In the question-and-answer section of the sponsored piece, Kieselyov comments. “There is no shortage [of scrap]; there is surplus. Steel plants are closing their gates to new shipments of scrap metal. There is a surplus of raw materials in the market. You can find out about it in the open sources: consumption of scrap metal by the steelmakers in the past six months was 100 percent covered, around 300,000 metric tons were exported and nobody suffered from that.”

He continues, “Ukrainian steelmakers do not wish for an alternative to exist. They want to be the sole consumers of scrap metal with all the benefits it involves.”

The trader says that while steelmakers have more lobbying force in Ukraine’s capital Kiev, the Ukrainian Association of Secondary Metals is letting large corporate scrap generators in the railway, energy and aerospace sectors know they will lose out on income if an export ban is enacted.

Prior and pending actions that have made scrap exports difficult have already caused damage to the scrap industry in Ukraine, Kieselyov says. “There is an anti-monopoly authority and it either sees [the downside] or not. Over the recent period, the industry has lost around 1.5 million metric tons of collected scrap metal; we lost over 600 companies that simply left the business in the past five years. We lost 12,000 jobs in our industry.”