Scrap metal procurement in Ukraine has decreased six times since independence: reasons
In Ukraine, the volume of scrap metal procurement has decreased sixfold over the years of independence. About this reported GMK Center think tank.
If at its peak in 2000, 11 million tons of scrap were produced in Ukraine, now it is only about 1.7 million tons.
The main reason for the decline is the deindustrialization of the economy. In Ukraine, industries that were previously the main generators of scrap metal have almost disappeared: mechanical engineering, the automotive industry, and heavy industry.
Previously, Ukrainian scrap was formed by recycling Soviet heritage – decommissioned factories, cars, and equipment. However, these reserves are practically exhausted.
According to experts, the degree of wear and tear of Ukraine's metal stock exceeded 90% by the beginning of the 2020s, and almost no new equipment is being received, because there is almost no investment in upgrades.
The situation was further complicated by a full-scale war. Some industrial regions found themselves in a combat zone or were occupied.
Donetsk, Luhansk, Zaporizhia, and Kherson regions used to produce about a million tons of scrap per year – now there is almost no income from them.
The war reduced the number of enterprises and workers, many companies closed. For comparison: in 2009, there were over 1,700 scrap metal companies in Ukraine, today there are no more than 100-120.
Mechanical engineering – the main source of scrap in the world – has practically disappeared in Ukraine. The share of this industry in GDP fell from 30% in 1991 to 11-12% in the 2020s. Car factories have stopped, the production of wagons, electric motors, and tanks has collapsed by 80-90%.
Although some Ukrainian factories have begun to produce products according to European standards, access to European markets for complex equipment remains very distant.
Therefore, according to experts, hopes for the revival of mechanical engineering currently seem unlikely.
According to forecasts by the industry association UAVtormet, 1.45–1.65 million tons of scrap will be collected in Ukraine in 2025. This is almost equal to the technical maximum that the country can collect under current conditions.
- In October 2024, Ukrzaliznytsia received the right independently lease property on a competitive basis, if its book value does not exceed UAH 500 million.
- On April 8, the Cabinet of Ministers allowed Ukrzaliznytsia sell scrap and rubble.
- The first after a year and a half break Ukrzaliznytsia's auctions for the sale of 12,000 tons of scrap did not take place due to low interest from the business side. But later the company did was able to sell seven out of 33 lots scrap.
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