The Ukrtrubprom association of pipe companies (Dnipropetrovsk) ha said that supply of scrap ferrous metal to metal companies has worsened and its exports has increased.
The association believes that the introduction of the export duty of EUR 50 per tonne should be accelerated.
According to a statement of Ukrtrubprom Director General Leonid Ksaverchuk published last week, the key beneficiary of the scrap metal policy of the Economic Development and Trade Ministry was business in the shadows.
The association said that the balance of formation and consumption of scrap ferrous metal for 2015 approved by the ministry is observed only in exports of scrap metal.
Ukrtrubprom said that out of 1.25 million tonnes of scrap metal planned for exports around 1.2 million tonnes will be exported at the end of 2015. Some 1.175 million tonnes was exported in January-November 2015.
"Thus, we make the first conclusion; exporters of scrap metal received the right and exported all the declared volume. However, in part of formation of scrap metal and its supply to metal companies, the balanced is not fulfilled. With plans to make 5.5 million tonnes of scrap metal this year, only 3.96 million tonnes was made in January-November 2015. The expected figure for the end of the year is 4 million tonnes. Metal companies faced a shortage of 764,000 tonnes of scrap metal in January-November 2015. The expected shortage as of late 2015 will be 800,000-850,000 tonnes," Ksaverchuk said.
"Due to this policy Ukrainian industrial enterprises that pay taxes and operate legally have suffered, and the budget was deprived of revenue. The main beneficiary of the scrap metal policy conducted by the ministry was one of the largest businesses in the shadows in the country – production and export of scrap metal. Despite announcements of law enforcement agencies on smuggling and money laundering and statements of metal companies on the shortage of scrap metal, the Economic Development and Trade Ministry made decisions this year that reflected the interests of this business in the shadows," he said.
"We believe that the most effective way of restoring status quo is the introduction of the export duty for scrap ferrous metal of EUR 50 per tonne," he said.
