Ukraine's Economy Ministry proposes allocating scrap metal export quotas through electronic auctions

Ukraine's Ministry of Economy, Environment and Agriculture has proposed introducing an experimental mechanism for allocating ferrous scrap metal export quotas through electronic auctions in the Prozorro.Sale system. The initiative comes amid disputes between metallurgical enterprises, which advocate maintaining export restrictions, and scrap collection companies, which demand the restoration of opportunities to supply raw materials abroad.

The corresponding draft resolution of the Cabinet of Ministers of Ukraine was published on the Economy Ministry's website on October 30, 2026, for public discussion.

The document provides for the introduction of a pilot project to allocate quotas for exports of ferrous metal scrap and waste under Ukrainian Classification of Goods for Foreign Economic Activity (UKT ZED) code 7204 through electronic auctions. The auction winners will receive the right to use the corresponding volume of the export quota and obtain a license to export the raw materials.

According to the ministry's explanations, the mechanism is intended to ensure equal access to quotas for enterprises of different sizes, prevent their excessive concentration among individual market participants and minimize anti-competitive practices.

It is also planned to establish procedures for using the quotas obtained and reallocating unused volumes. Oversight will be carried out through information exchange between the Economy Ministry, the State Customs Service and the electronic trading system.

At the same time, the draft does not specify the total volume of the export quota. Thus, the published document primarily regulates the mechanism for its allocation rather than establishing specific volumes of permitted exports.

Comments and proposals concerning the draft resolution will be accepted for one month from the date of its publication.

Scrap collection companies demand the removal of export restrictions

The Ukrainian Association of Secondary Metals, UAVtormet, has repeatedly appealed to the government to review the zero quota on ferrous scrap metal exports introduced on January 1, 2026.

During the press conference "Ukraine's Scrap Metal Market: Between Economic Needs and Regulatory Uncertainty," held on September 16 at the Interfax-Ukraine news agency, association president Volodymyr Bubley stated that the effective export ban had negatively affected the operations of scrap collection enterprises, led to a reduction in collection volumes and resulted in employee layoffs.

According to him, domestic demand for scrap metal declined as Ukrainian metallurgical enterprises reduced their operations, particularly because of Russian attacks on industrial and energy infrastructure.

Bubley considers the introduction of the zero quota without first determining the balance between scrap collection and consumption to be unjustified and insists on its removal.

"Today, virtually all our enterprises are not producing products or collecting scrap. This also affects the revenues of Ukrzaliznytsia because domestic scrap prices are much lower compared with world prices," the head of the association said.

Representatives of the scrap collection business propose a compromise solution: restoring controlled scrap metal exports to European Union countries with an annual quota of up to 200,000 tonnes.

The corresponding proposal was put forward as early as June 26, 2026, during a press conference at the Interfax-Ukraine news agency.

At that time, Bubley noted that domestic scrap metal prices had fallen significantly because of export restrictions. According to the data he provided, Ukrzaliznytsia sold scrap for approximately UAH 5,500 per tonne in 2026, whereas the average price in 2025 was UAH 8,500.

At the same time, purchase prices in the European market were significantly higher, which, according to industry representatives, created opportunities to export surplus raw materials and generate additional foreign currency revenues.

Scrap collection companies also called for a government-level meeting to determine the actual balance between domestic scrap metal production and consumption. Separately, they opposed a possible increase in the tax burden on transactions involving these raw materials.

During the September press conference, Serhii Vovk, CEO of UkrMetinvest LLC, reported that his company had laid off 180 employees and that only four of its 18 production workshops remained operational.

According to him, more than 14,000 tonnes of scrap metal had accumulated in the company's warehouses, which the enterprise was unable to sell.

Mykola Klymovych, Development Director of Mirten LLC, stated that scrap collection had declined by approximately 400,000 tonnes during the first eight months of 2026, while losses in tax revenues, according to industry representatives' estimates, exceeded UAH 1 billion.

Vladyslav Kleshchynskyi, CEO of the UKRMET group of companies, also emphasized the need to restore controlled exports to the EU. In his assessment, without the possibility of selling raw materials on foreign markets, a significant proportion of scrap collection enterprises could face the risk of ceasing operations.

At the same time, the loss estimates provided by the companies reflect their position and are not the result of an independent government assessment of the economic consequences of the restrictions.

According to UAVtormet, Ukraine produced 4.3 million tonnes of steel in January–August 2026. By comparison, steel output for the whole of 2025 amounted to 7.41 million tonnes.

Scrap metal deliveries to metallurgical enterprises reached 925,400 tonnes over eight months, while scrap collection amounted to 971,700 tonnes.

According to the association's preliminary forecasts, steel production will amount to 6.4–6.5 million tonnes by the end of 2026. At the same time, metallurgical enterprises will receive 1.2–1.25 million tonnes of scrap, while total scrap collection volumes may amount to 1.22–1.25 million tonnes.

Against the backdrop of the restrictions, ferrous scrap metal exports from Ukraine have virtually ceased.

In January–August 2026, Ukrainian enterprises exported 13,860 tonnes of scrap, compared with 283,060 tonnes during the same period of 2025. The decline amounted to 95.1%, or more than twentyfold.

In monetary terms, exports decreased to $3.93 million from $85.4 million a year earlier.

At the same time, the bulk of this year's exports, 9,310 tonnes, took place in January as part of the fulfillment of contracts from the previous year. There were no exports in February–May; exports amounted to 4,080 tonnes in June, 315 tonnes in July and 157 tonnes in August.

Meanwhile, in 2025, before the restrictions were introduced, Ukraine increased ferrous scrap metal exports by 53% compared with 2024, to 448,680 tonnes.

Steelmakers oppose the removal of the zero quota

In contrast to the position of scrap collection companies, large metallurgical enterprises advocate continuing export restrictions.

On September 28, the European Business Association (EBA) appealed to the Cabinet of Ministers and the Economy Ministry with a proposal to maintain the zero quota on scrap metal exports in 2027.

The association believes that amid the full-scale war, damage to industrial infrastructure and the needs of economic recovery, scrap metal remains a strategically important raw material for Ukrainian metallurgical enterprises.

According to the EBA, removing export restrictions could lead to an increase in foreign shipments and the emergence of a shortage of raw materials on the domestic market.

As an alternative to the zero quota, the association's member companies propose establishing an export duty of EUR 180 per tonne for all export destinations, taking Ukraine's international obligations into account.

The Ukrmetalurgprom association of enterprises also opposes a premature resumption of exports.

At the end of October, association president Oleksandr Kalenkov stated that it was necessary first to analyze the actual volumes of scrap metal collection and consumption for September–November 2026.

According to him, only after assessing the actual market balance will it be possible to determine whether there is a surplus of raw materials that would be appropriate to export.

In addition, Ukrmetalurgprom opposed introducing separate exemptions for state-owned enterprises when exporting scrap metal and proposed ensuring equal conditions for selling raw materials for all market participants.

A decision on export quotas has not yet been made. The government introduced the zero quota on ferrous scrap metal exports effective January 1, 2026, to provide the domestic metallurgical industry with strategic raw materials.

At the same time, under Resolution No. 563 of April 29, 2026, the Cabinet of Ministers provided certain opportunities for licensed exports by foreign economic activity entities that had won designated electronic auctions in December 2025.

The Economy Ministry's new draft proposes creating a broader competitive mechanism for allocating export quotas through Prozorro.Sale.

However, the mere publication of the draft resolution does not mean the automatic abolition of the zero quota or the restoration of unrestricted scrap metal exports. The practical launch of the mechanism requires the adoption of a corresponding government decision and the determination of the quota volume that may be distributed among auction participants.

Thus, further regulation of scrap metal exports will depend on the government's decision regarding the balance of interests between Ukrainian metallurgical enterprises and the scrap collection industry.

UAVtormet brings together enterprises engaged in the collection, processing and sale of secondary metals. The organization represents participants in Ukraine's scrap metal market and takes part in discussions concerning regulatory oversight of the industry.