Ukraine decides to resume scrap sales

After a six-month break in Ukraine, government officials, parliamentarians, representatives of the Ukrainian Railway (UZ) and representatives of metallurgical companies met in the economic committee of the Council to remove obstacles to scrap metal sales by rail. After the meeting, which took place in a constructive atmosphere, the deputy chairman of the Committee, Dmytro Kysilevskyi, announced that the parties had reached a common understanding and assurances were given that UZ would resume scrap sales in March.

Since mid-February, the shortage of scrap on the Ukrainian domestic market has increased due to the destruction of facilities caused by military operations, the presence of mines and the reduction in the number of people due to mobilisation. This situation affected the planned volumes in steel production, and some companies turned to the wrong technology, replacing scrap shortages with pig iron. Ukrzaliznytsia's decision to stop scrap sales in September caused a significant blow to the metallurgical sector.

Oleksandr Kalenkov, President of Ukrmetalurgprom, stated that Ukrzaliznytsia could significantly improve the situation with its scrap offer and called on the Economic Committee of the Council to resume dialogue with the Ukrainian Trade Union.
Metallurgical companies stated that Ukrzaliznytsia's decision to stop scrap sales caused shortages in steel production, leading to loss of profitability. Representatives of the metal industry expressed expectations that production volume will increase after UZ resumes scrap sales in March.

In 2022, Ukrzaliznytsia sold 113,000 tonnes of scrap for UAH 670 million, but in 2023 these figures dropped to 76,000 tonnes and UAH 460 million. Metallurgists claimed that UZ stopped supplies from the first quarter of 2023.
Yevhen Lyashchenko, Chairman of the Board of Ukrzaliznytsia, said that there are objective reasons for the scrap sales halt and that they expect the government to amend Resolution No. 1054.

Representatives of the metal industry emphasised that UZ should strengthen its operational communication and market relations after the resumption of scrap sales in March. The Ministry of Finance is expected to announce its views on Resolution 1054 in the near future.