President Petro Poroshenko signed the law, providing for extension by one year – till September 15, 2019 – the effect of export duty of ferrous scrap metal. Meanwhile, its amount increases from €30 to €42 per ton, according to the data, posted on the website of the respective law (№8226) on the website of the Verkhovna Rada.

The law was signed on June 18. It was put to the vote a month ago, May 17.

It should be reminded that the duty has been effective since September 15, 2016; initially its rate was set at €10 per ton. It was twice extended.

The purpose of liquidation of the deficit of ferrous scrap metal on the internal market for meeting the needs of the defense industry and creating conditions of restoring the infrastructure facilities was the grounds for imposing restrictive measures.

The explanatory note says that as per results of 2017 we can state that the triple increase of the export duty for ferrous scrap metal (up to 3 euros/ton) had positive effect for the metallurgic industry (reduction of the scrap metal deficit from 20% to 9%, increase of steelmaking and production of separate types of the metallurgic products) and for the state budget (additional 231 mln hryvnias of receipts).

“However, the upward dynamics of global prices for the scrap metal in 2017 continued to stimulate its export from Ukraine; at the same time, the export duty for scrap metal (30 euros/ton) gradually lost its “limiting” effect, because its share in price decreased from 18.9% in 2016 up to 13.5% in 2017”, the explanatory note says.

The activation of its procurement by Pridnestrovian Moldavian Republic as the result of formation of non-market conditions of access of local metallurgic producers to electrical energy also became one more significant factor of growth of scrap metal export in the last year.

In addition, the blockade of transport communication with temporarily uncontrolled territories created the additional basis for strengthening the deficit of ferrous scrap metal on the internal market.

That is why, as noted in the explanatory note, it is expedient in the national interests of Ukraine to continue the effect of the increased export duty on scrap metal, increasing its size for reducing its negative effect (increase in export), caused by the increase of global prices for this type of raw material, thus contributing to the reduction of scrap metal deficit on the internal market and ensuring uninterruptible operation of the metallurgic industry, meeting the needs of the defense industry.