Ukrainian Steel Mills Seek Ban on Steel Scrap Exports
Reuters reported that Ukraine's steel makers, after scrap exports surged amid a sharp price rise that has threatened to leave producers short of raw materials, have called for a ban on scrap exports until 2023 to help local steel producers. The steel makers' union said that prices for scrap metal had almost doubled over the past year to USD 468 a tonne and an export duty of EUR 58 per tonne was not enough to put a brake on exports. The union said the volume of scrap exports could exceed 1.5 million tonnes in 2021. It gave no scrap export data for 2020. Producers procured about 750,000 tonnes of scrap for the whole of 2020. They said surging exports could lead to a 500,000-tonne shortage of scrap for local producers this year, which would lead to a 9.5% fall in Ukrainian steel production.
Ukraine's scrap export duty was a point of contention when the country was working towards joining the World Trade Organisation, which it finally did at the beginning of 2008. The EU refused to endorse Ukraine's WTO membership unless the country agreed to reduce or remove its scrap export duty, which was at EUR 35 per tonne at the time. Ukraine subsequently agreed to cut the duty to EUR 10 per tonne for six years from the date of accession. Ukraine increased its ferrous scrap export duty to EUR 30 per tonne in September 2016 and gradually increased it to the current level of EUR 58 per tonne in September 2019. An extension of the duty for another five years to September 2026 at the current price was submitted in early March, following discussions at the beginning of this year and a request from Ukrainian steelmakers in mid-February. The parliament's committee on environmental policy and management endorsed the extension proposal in early April but President Mr Vladimir Zelensky has not yet accepted or rejected the bill.
Besides Ukraine, Russia has also made plans to implement stricter export restrictions for scrap while Kazakhstan reinstated a ban on exports by truck. Both countries' restrictions were introduced after intensive lobbying by steelmakers despite protests from the scrap recycling industry. Russia's Prime Minister Mr Mikhail Mishustin signed a resolution on 23 June to increase export duties on ferrous scrap to 5#, but no less than EUR 70 per tonne, up from the current duty of 5%, but no less than EUR 45 per tonne, for 180 days.