OREANDA-NEWS. Ukrainian ferrous scrap exports will be subject to a €30/t ($34/t) duty after a draft bill was approved and ratified by the country's parliament today.

The government aims to ensure effective functioning of the country's steelmaking sector, which has experienced a significant scrap shortage for several years. The original proposal was to levy a €35/t duty, with some steelworks saying a €50/t duty is needed to ensure sufficient scrap supplies to the country's steelmakers. The €30/t level has been considered optimal, as any higher levy could negatively affect scrap collection in the country.

The new duty will be applied for a three-year period, and the 5pc import duty for scrap will be annulled. The export quota for 1.1mn t of scrap for this year will be cancelled, but it is not yet clear if the new duty will affect the already-issued quota for 448,000t since the beginning of the year. It is also unclear when the duty will come into effect.

A higher export duty is the only way to streamline the market and alleviate scrap shortages, according to steelmakers. Ukrainian domestic scrap collection in the first quarter was 614,000t, the lowest for 20 years. The estimated scrap shortfall in January-March was around 176,000t against expected consumption of 790,000t, according to state-controlled metals and mining association Metallurgprom.