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Ukrzaliznytsia has untapped potential for scrap metal sales

19/ 10/ 2020

According to the EBA experts, Ukrzaliznytsia can potentially sell about 300 thousand tons of scrap metal per year and receive additional annual income in the amount of 1-1.5 billion UAH. However, this potential is not yet fully used.

Thus, the utilization of wagons written off for scrap metal and excluded from the automated data bank of the freight car fleet is being conducted too slowly. Currently, the rate of utilization is 100-400 cars per month, which does not meet the needs of the market, because the optimal amount of processing can be 800-1000 cars per month.

The EBA experts note that scrap metal is a scarce raw material for the metallurgical industry of Ukraine, and given that Ukrzaliznytsia is one of the largest producers of scrap metal, inefficient and unpredictable process of its utilization may increase the deficit in the scrap metal market.

Daria Sichkar EBA Logistics Committee Manager
Companies are concerned that due to Ukrzaliznytsia′s failure to implement plans to sell scrap metal in 2020, the company will not receive a significant amount of funds needed for the development and implementation of investment programs. Besides, due to the low rate of scrap metal disposal on its own, Ukrzaliznytsia spends additional funds on its storage and protection, and it loses its value due to corrosion and other external factors.

The EBA experts consider that Ukrzaliznytsia can speed up the recycling of scrap metal by selling it to specialized metallurgical enterprises for further processing or by attracting contractors to process such scrap metal on the territory of Ukrzaliznytsia.

In this regard, the business appealed to the Prime Minister of Ukraine to assist in resolving the problematic issues of sale and recycling of Ukrzaliznytsia’s scrap metal and, particularly, to instruct Ukrzaliznytsia and the Ministry of Infrastructure to accelerate the pace of scrap metal sales. We hope that the Prime Minister will pay due attention to this issue!

 

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