Ukraine’s ferrous scrap deficit boosts imports
Domestic supply of ferrous scrap in Ukraine remained below steelmakers' requirements, despite the introduction of a higher scrap export duty in April, driving mills to seek seaborne material.
Ukrainian imports of ferrous scrap in January-October rose by 46pc on the year to 45,669t, of which 59.2pc and 31.6pc came from Turkey and Russia, respectively. The cost of imports in this period was $29.5mn, up by 1.8pc on the year.
Domestic scrap prices were more competitive compared to seaborne material but a sustained period of domestic supply shortage prompted mills to increase seaborne intakes.
Domestic prices were about 4,900 hryvnias/t ($199.95/t) in mid-October, while import prices were about $256/t, industry association UAVtormet said. Export prices averaged $141/t fob Black Sea before the €58/t export duty.
These domestic and export price levels are considered insufficient and drove many scrap suppliers to cut operations.
As a result, domestic shipments to Ukrainian steel mills fell by 5pc on the year to 2.6mn t in January–October. This is 5pc below mills' requirement. Supply rose in October to 250,000t, up by 8.7pc on the month, and helped boost steelmakers' stock levels on 1 November by 55.5pc on the month to 140,000t, data from state-controlled metals association Ukrmetallurgprom show.
The introduction of a higher scrap export duty brought Ukrainian scrap exports to a halt for a fifth consecutive month in October. The country's exported volume that month was the lowest so far this year.
Ukraine's ferrous scrap exports were 7.8 times lower year on year in January-October, totalling 40,736t, the state fiscal service said. They generated revenue of $11.31mn, down by 89pc on the year.
The country exported 103t of ferrous scrap in October, the lowest monthly exported volume so far this year, with January–October export deliveries of 40,736t being 7.8 times lower than last year's 10-month total of 316,196t, the custom data from the state fiscal service show.
The Argus assessment for Russia-Ukraine A3-grade ferrous scrap fob Black Sea averaged $250.01/t in January-October, compared with an average of $294.35/t in the same period last year.
Turkey was the main buyer of Ukrainian scrap in January-October, accounting for 86.7pc of the market. It was followed by the Netherlands and Germany at 6.5pc and 4.8pc, respectively.
source: Argus Media
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