The Economic Toll of Ukraine's Scrap Metal Export Restrictions
A ban on the export of ferrous scrap metal, in place until the end of 2025, is inflicting severe economic damage on Ukraine. According to the Ukrmetallurgprom Association, while scrap exports surged from 50,000 tons in 2022 to 450,000 tons in 2025, domestic scrap collection within Ukraine has plummeted severalfold. This has created a critical shortage of roughly 200,000 tons on the domestic market, severely hampering the nation's steel industry. The steel sector is a cornerstone of Ukraine's industrial economy, making this shortage particularly damaging.
Oleksandr Kalenkov, President of the Ukrmetallurgprom Association, estimates that in 2025 alone, Ukraine lost approximately $700 million in foreign currency revenue and billions of hryvnias in tax income due to reduced steel production. Scrap metal is an essential raw material for all steelmaking processes, including basic oxygen, electric arc, and open-hearth furnaces. The issue is further highlighted by the scale of Poland's scrap market, which consumes about 7 million tons annually.
The Current State of the Scrap Market
In 2024, Ukraine supplied 350,000 tons of scrap to Poland, accounting for less than 5% of the Polish market. Meanwhile, Poland itself exported around 3 million tons of scrap. Ukraine imposes an export duty of 180 euros per ton on scrap; the association calculates that enforcing this duty in 2024 could have generated over 80 million euros in revenue for the state budget.
“Consultations with the European Commission on the quota have been ongoing since 2023.” - Oleksandr Kalenkov
Kalenkov also noted a significant trade imbalance with Poland: in 2025, imports from Poland to Ukraine reached nearly $8 billion, while Ukrainian exports to Poland totaled $5.1 billion. Following the loss of Pokrovsk, Ukraine has been forced to purchase Polish coking coal and coke. This dependency underscores the complex economic relationship between the two nations.
Under the EU's Steel Action Plan, exports of scrap to non-OECD countries are set to be restricted starting in 2027. Kalenkov argued that since Poland exports seven times more scrap than it imports from Ukraine, it clearly has no urgent need for Ukrainian scrap. He warned that restrictions on Ukrainian products could lead to plant shutdowns in Ukraine, which would in turn reduce imports of Polish goods, especially coke and coking coal.
This situation underscores the urgent need to develop Ukraine's domestic scrap market and reconsider its export policy. To address the internal shortage, Ukraine must focus on boosting domestic scrap production and collection to reduce import reliance and ensure the stability of its metallurgical sector. Simultaneously, ongoing negotiations with the European Commission will be crucial in shaping future scrap export rules, which will have a direct impact on the country's economic health.