Industry Calls for Scrap Metal Export Restrictions
Ukrainian industry representatives are urging limits on scrap metal exports, citing rising outflows, significant budget losses, and the economic benefits of domestic processing. Kseniia Orynchak, Executive Director of the National Mining Association of Ukraine (NADPU), highlighted that in 2025, scrap metal exports surged by 53% to reach 448.7 thousand tons, the highest level in four years. This trend is alarming, as the state budget loses over UAH 3 billion annually due to re-export schemes. Scrap metal is a crucial raw material for the steel industry, and its export represents a loss of both strategic resources and potential revenue.
'We are essentially losing strategic raw material needed for our metallurgical sector, while simultaneously failing to secure proper budget revenues.' Kseniia Orynchak
Orynchak further emphasized that processing one ton of scrap domestically generates about UAH 15,000 in taxes and up to $1,200 in foreign currency earnings from exporting finished products. In stark contrast, directly exporting raw scrap brings in only $250–$350 per ton and minimal tax revenue.
Economic Consequences of Scrap Metal Exports
Serhii Povazhniuk, Deputy Director of the State Enterprise 'Ukrpromzovnish ekspertyza', noted that exporting ferrous scrap yields the state an average of UAH 50 in taxes per ton. Meanwhile, metallurgical plants that process scrap within Ukraine pay over UAH 7,500 per ton. When taxes from related industries are included, the fiscal benefit from processing can reach up to UAH 14,000 per ton. Consequently, exporting raw scrap generates roughly 280 times less tax revenue for Ukraine than domestic processing does.
Kseniia Orynchak also pointed out that 'we cannot reliably fulfill contracts and are gradually losing our position in key markets.' Utilizing scrap metal in domestic processing not only improves economic indicators but also has a positive environmental impact: it reduces CO₂ emissions by 1.5 tons for every ton of raw material and cuts energy consumption by threefold. These factors underscore the importance of restricting scrap exports and supporting Ukraine's internal processing capacity.
The rise in scrap metal exports threatens not only the nation's economic interests but also its environmental goals. Supporting domestic processing could strengthen state finances and contribute to ecological preservation by reducing harmful emissions. In a globally competitive landscape, it is vital for Ukraine to retain strategic resources and develop its own metallurgical industry, which can form a foundation for sustainable economic growth in the future.
As the Ukrainian industry grapples with the implications of increased scrap metal exports, it is essential to understand the broader context of the country's steel sector. The ongoing conflict has significantly impacted operations, yet Ukraine remains a top-20 global steel producer. To explore how this vital industry continues to function amid adversity, read more about the resilience of Ukraine's steel industry.