Industrial enterprises have adapted to new challenges and are trying to resume production, despite the risks of shelling and power outages. At the same time, there are serious risks that can throw enterprises into crisis positions, as well as force them to stop production. One such risk is a shortage of scrap metal. The MMC Center writes about this in its study.
“Due to the hostilities in the industrial regions, where the share of blanks was the highest, the volume of scrap decreased by 75.9% compared to 2021 – to 996.7 thousand tons. Already in the first two months of 2023, scrap collection decreased by 70% y / y – up to 152.2 thousand tons,” analysts point out.
The experts interviewed by the publications emphasize that there are no tools yet to intensify the procurement of scrap metal, so the forecasts for 2023 are disappointing: even in the optimistic scenario, the collection of scrap metal will be about 800 thousand tons. At the same time, the need of metallurgists in the base scenario will reach 1 million tons.
“In addition, the export of scrap metal has increased. If at the end of 2022 this figure decreased by 11.4 times y/y, then in January-February 2023, exports increased by 3.5 times. Such an increase in exports threatens with a shortage of raw materials for Ukrainian steel plants who are making plans to restart production. Unfortunately, since March 16, the Interpipe Steel plant has already stopped working due to a shortage of scrap metal.
As a result of the fall in the level of scrap collection and the increase in the export of this strategic raw material, a shortage of scrap at the level of 100 thousand tons is expected in the second quarter of this year, and without prompt solutions, this problem will worsen, experts warn.
“The export of scrap metal from Ukraine is detrimental to our steel companies. In the worst case, we will have to stop production. The situation is complicated, decisions must be made at the state level, up to returning to the idea of banning exports for the period of hostilities. Moreover, the state needs to strengthen control over so that the scrap metal supplied to the EU is destined for the end consumer. After all, most often exports to the EU are purely nominal in order to get rid of the duty, and the raw materials are subsequently re-exported, possibly to Turkey. This is a task for diplomats, trade investigations are not ruled out,” notes the head of the analytical center CMD-Ukraine Igor Guzhva.
Recall that earlier the media published data, according to which players in the gray scrap metal market have established and launched sales channels to the European Union at full capacity. The shadow scheme operates under the guise of customs officers in the western regions of Ukraine, and the country has already lost at least 350 million hryvnias on the export moment. DBR has already become interested in the scheme: they announced the start of an investigation.
Source: Obozrevatel
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