Fight for metal: why scrap metal is in short supply in Ukraine and what to do about it
5 January 15:22
For years now, Ukraine has been trying to curb the growth of scrap metal exports, while taking care of the interests of steelmakers in particular. And 2026 could be a decisive year here. Kommersant found out how the struggle for this strategic resource is unfolding in Ukraine.
In January-November 2025, Ukraine’s exports of ferrous scrap increased by 45.3% compared to the same period in 2024, to 380.16 thousand tons. This figure has already exceeded the total volume of shipments in 2024 by more than 86 thousand tons. This is evidenced by GMK Center’s calculations based on data from the State Customs Service. However, the figures for January 2026 are unlikely to show similar dynamics, as the government has set zero export quotas for the export of scrap from Ukraine for this year, effectively banning its export.
Dmytro Kysylevsky, Deputy Chairman of the Verkhovna Rada Committee on Economic Development, explained why strategically important raw materials should be processed in the country and not uncontrollably exported abroad, and made the following economic argument:
“1 ton of scrap processed into finished products in Ukraine generates approximately UAH 15 thousand in taxes. 1 ton of scrap exported without duty actually generates no taxes, reaching only about UAH 100 per ton, as scrap metal procurement remains mostly a shadow business.”
Oleksandr Kalenkov, president of Ukrmetallurgprom, echoed these arguments and emphasized that the government’s decision to temporarily restrict exports of ferrous scrap is an urgent and economically justified measure. According to the association’s statement, the growth of scrap metal exports from Ukraine “significantly worsened the security situation in the domestic steel industry, increased the shortage of this raw material in the domestic market and disrupted the stability of steel mills.” But not everyone thinks so.
There are those who are against it
Representatives of the domestic mining and metals industry called the government’s decision to introduce a zero export quota for scrap metal not only a state decision, but also a strong-willed one. This can be seen as evidence that the decision was not taken lightly and that it has both supporters and opponents. Among the latter, of course, are those who export scrap metal. And their representatives have their own explanations for the figures and trends.
Volodymyr Bublei, President of the Ukrainian Association of Secondary Metals “UAVtormet”, confirms that in 11 months of 2025, exports of ferrous scrap increased by more than 45% to 380.2 thousand tons. He believes that this was the result of Interpipe Steel’s six-month downtime, which led to a significant imbalance of scrap – more than 600 thousand tons, or about 50 thousand tons per month. This means that we can conclude that the excess scrap was exported.
“The key sources of scrap in the world are, firstly, industry, i.e. metal processing waste; secondly, depreciation scrap, i.e. metal products that have reached the end of their useful life; and thirdly, household scrap. The first source is the main one in developed countries. In Ukraine, the metalworking industry, for example, machine building, has significantly degraded. And the key source is depreciation scrap. Its specificity is that this source is exhaustible, as the scrap industry is currently operating on a resource that was created in the Soviet era. This is not sustainable in the long term, and over time, the procurement rate starts to decline. Hence the shortage. It should also be borne in mind that the main metalworking facilities that generated scrap were located in the southeastern regions of Ukraine, where the war is on,” the expert said.
According to Ukrmetallurgprom, the market is currently experiencing a shortage of scrap, which amounted to 180,000 tons in the first nine months of last year. In an interview with GMK Center, Oleksandr Kalenkov, President of Ukrmetallurgprom, emphasizes another advantage of using scrap metal domestically.
“Keeping scrap within the country will allow us to increase production, reduce costs and increase tax revenues. Obviously, the government’s economic policy should be aimed at stimulating the export of processed products rather than raw materials. And setting a zero quota for 2026 is economically justified,” emphasizes Oleksandr Kalenkov.
He cites the following data: metal made from recycled scrap and exported brings 8-10 times more revenue to the budget than raw scrap exported in transit through the EU. Ukrmetallurgprom estimates that the loss of foreign exchange earnings under this scheme amounted to $0.5-1.1 billion over 9 months.
Exports to the EU are banned
For the Ukrainian government, the decision to introduce zero export quotas for the export of scrap from Ukraine, i.e. a de facto ban on its export, was a “strong-willed” one for another reason. Some in the European Union may not like it. In fact, they already don’t like it. And not only because it is administrative, not market-based, when prices decide everything. Brussels has long spoken to its Ukrainian partners in the language of quotas and duties. But there are also those “partners” who threaten stricter protective measures.
Michał Poluboczek, a member of the Polish parliament from the Confederation party, recently wrote on his X social media page that “Poland can no longer pretend that nothing is happening.”
“Ukraine, under pressure from oligarchs and steel monopolies, is imposing a ban on scrap metal exports, striking a blow to the Polish and European steel industry. The result is simple: our steel mills are losing raw materials, jobs are at risk, and Ukrainian industrial complexes are planning to dump steel to the EU at prices 20-25% below market prices. This is not free trade, it is economic aggression,” the Polish MP said.
He spoke in favor of tough protective measures: putting pressure on the EU, abolishing trade exemptions for the Ukrainian steel industry and introducing real anti-dumping mechanisms.
“These are not anti-Ukrainian sentiments. This is a basic state policy. Cooperation – yes. Exploitation of Poland – no,” wrote Michał Poluboczek, a member of the Polish parliament from the Confederation party.
It is no coincidence that Poland is worried. Poland, though not only it, has become a figurative “window out of Europe” for Ukrainian scrap metal exporters, to India or Turkey.
Why was this Polish transit site needed? It is worth recalling here that Ukraine has been trying to block large-scale scrap exports from the country for years. There have been attempts to allocate export permits, quotas and duties. For example, export duties have increased from €10 per tonne to €180 per tonne since 2015. But this was not enough to limit the export of strategic raw materials. In addition, the zero export duty that is in place under the Free Trade Agreement with the EU has opened up the possibility of transit and re-export of scrap without paying any duty through the EU to third countries. Experts believe that Poland is the main transit route for Ukrainian scrap, and cite the following data as evidence: in 2024, exports of Polish scrap to Turkey more than doubled to 529 thousand tons, up from 228 thousand tons a year earlier.
According to Stanislav Zinchenko, CEO of GMK Center, the export duty does not stop the export of scrap metal, as there are still opportunities for “workarounds”.
“Scrap is exported to Poland and from there to Turkey, which is the largest buyer. The fact is that according to the Association Agreement, the duty rate for scrap exports is EUR 0 per ton. If exports were made directly to Turkey, the duty would be 180 euros. As it is, there is both an increase in exports and non-payment of the duty, which means the state does not receive any revenue. In the near future, demand for scrap on the global market will increase significantly, primarily from China and India. So, if scrap exports continue to grow, Ukrainian steelmakers will be left without raw materials,” the expert says.
It turns out that without the ban on scrap metal exports, Ukrainian steelmakers would have no raw materials, and the Ukrainian state would be left without additional budget revenues. According to Dmytro Kysylevsky, Deputy Chairman of the Parliamentary Committee on Economic Development, scrap exports to the EU were de facto a scheme to avoid duties, with budget losses of about UAH 3.5 billion a year. And if 380 thousand tons of scrap exported from Ukraine in 2025 were processed domestically, the state would receive UAH 5.7 billion in taxes.
And one more thing to summarize. According to experts, the restriction of scrap exports, as well as its shortage, is becoming a global trend: 48 countries have already restricted exports of ferrous scrap, and 38% of them have banned scrap exports. By the way, in October, the European Commission adopted the Steel Action Plan, which also considers restricting scrap exports. At least, the specialized metallurgical association Eurofer proposes to introduce export duties. Europe can already follow Ukraine’s example.
Author: Sergiy Vasilevich
