--- title: "GMK Center: Steel Scrap Export Projects in Ukraine May Yield Only €5.4M for the Budget While Traders Pocket €17.2M in Excess Profits" description: "GMK Center warned that draft decisions on steel scrap exports in Ukraine could lead to budget losses and new schemes. The key risk is the auction starting price of €27 per ton." date: 2026-11-13T12:47:22.749Z lang: en url: https://xab.info/en/posts/gmk-center-steel-scrap-export-risks tags: [steel-scrap, ukraine-economy, export-quota, gmk-center, budget, metallurgy] author: "Darya Fomina, Andrey Kosynko" publisher: "XAB.info" --- # GMK Center: Steel Scrap Export Projects in Ukraine May Yield Only €5.4M for the Budget While Traders Pocket €17.2M in Excess Profits ![Workers and heavy machinery at a steel scrap processing and loading facility](https://xab.info/media/2026/11/13/gmk-center-eksport-stalnogo-loma-riski-byudzhet/gmk-center-eksport-stalnogo-loma-riski-byudzhet-1.webp) ## Key Points - GMK Center warns that steel scrap export projects require revision due to the risk of budget losses and new schemes - At a starting price of €27/ton, the budget will receive only €5.4M, while traders' excess profits will rise to €17.2M - 90% of scrap exports in 2024–2025 came from 11 companies, creating a risk of price collusion - Processing 1 ton of scrap yields 14,000–15,000 UAH in budget revenue compared to 50–104 UAH for direct export - The Cabinet introduced a zero quota on scrap metal exports for 2026 via Resolution No. 1795 of December 31, 2025 The GMK Center analytical agency has warned that current government draft decisions regarding the export of steel scrap in Ukraine require substantial revision. According to expert assessments, the current model for distributing the export quota could lead not only to direct losses for the state budget but also to the creation of new opaque schemes in the scrap metal market. This was reported by RBC-Ukraine, citing a publication by GMK Center. ### Price Risk: €27 vs. €80 Per Ton One of the key risks highlighted by analysts is the starting price of €27 per ton for auctions distributing the 200,000-ton export quota, which is currently being discussed in the Ministry of Economy of Ukraine. The ministry operates on the assumption that even a price of €27 per ton is sufficient. However, GMK Center's own calculations show a different picture: if the quota is sold at this price, the budget will receive only €5.4 million, whereas traders' excess profits will nearly triple to €17.2 million. With an alternative starting price of €80 per ton, the center estimates the budget could collect around €16 million, while exporters' excess profits would amount to roughly €6.6 million. ### Market Concentration and Price Collusion Risk GMK Center points to low competition among scrap metal exporters as an additional risk factor. According to analysts, in 2024–2025, 90% of scrap exports were concentrated among just 11 companies. The center observed that some of these entities had a minimal number of officially registered employees, which may indicate the use of intermediary and opaque schemes. In the experts' view, such concentration creates preconditions for price collusion during quota distribution auctions. ### Exempting State Companies from General Restrictions Another risk relates to the proposal allowing state-owned companies to export scrap metal outside general restrictions. GMK Center warns that such a norm could create uneven market conditions and open up possibilities for a scheme where private scrap is exported under the guise of state scrap. According to analysts, this would further increase budget losses and amplify market opacity. ### Processing Economics vs. Direct Export The analytical center also draws attention to the significant difference in budget revenues generated from scrap processing versus its direct export abroad. According to GMK Center's calculations, processing one ton of scrap into finished steel products provides about 14,000–15,000 UAH in budget revenues, whereas direct export brings in only 50–104 UAH per ton. Thus, exporting without processing costs the state hundreds of times more in terms of lost opportunities. ### Domestic Demand and the Role of Major Consumers Amid the forced downtime of steel plants, domestic demand for scrap metal has objectively decreased. Nevertheless, according to GMK Center, major consumers—Metinvest Holding and Interpipe—are ready even now to purchase scrap metal in volumes no less than 65–70% of what is put on the market, with growth potential up to 90–95%. "Only in this way will every ton of Ukrainian scrap work to replenish the budget and defense, rather than line the pockets of 'shadow' representatives of the scrap collection industry," the analytical center concluded. ### Context: Zero Quota for 2026 and "Gray" Schemes To recap, on December 31, 2025, the Cabinet of Ministers of Ukraine adopted Resolution No. 1795, introducing a zero export quota for scrap metal throughout 2026. Prior to the ban, scrap export volumes had been steadily increasing. Meanwhile, despite the established export duty of €180 per ton, Ukraine practically received no revenue from it: scrap was exported through Poland with zero duty and then redirected to Turkey. Due to such "gray" export schemes, the state budget is estimated to have lost over 3 billion hryvnias. ## Accounts differ ### Sufficiency of the auction starting price for the scrap metal export quota - **Ministry of Economy of Ukraine:** A starting price of €27 per ton is sufficient for distributing the export quota ([rbc.ua](https://www.rbc.ua/ukr/news/uryadovi-rishennya-shchodo-eksportu-bruhtu-1794570775.html)) - **GMK Center:** At €27/ton the budget will receive only €5.4M while traders' excess profits will rise to €17.2M; at €80/ton the budget will receive about €16M and exporters' excess profits about €6.6M ([rbc.ua](https://www.rbc.ua/ukr/news/uryadovi-rishennya-shchodo-eksportu-bruhtu-1794570775.html)) *Where they agree:* An export quota of 200,000 tons is being discussed in the Ministry of Economy; an auction distribution mechanism is envisaged ## Fact-Check & Sources - [Правительственные решения по экспорту металлолома могут создать новые схемы и потери бюджета, - GMK Center](https://www.rbc.ua/ukr/news/uryadovi-rishennya-shchodo-eksportu-bruhtu-1794570775.html) - Primary source. Contains the full text of GMK Center's analytics: calculations on auction prices, data on market concentration (11 companies, 90% of exports), comparison of budget revenues from processing vs. export, and mention of Resolution No. 1795. - [GMK Center: правительственные решения по экспорту металлолома могут создать новые схемы и потери ...](https://www.unian.net/economics/other/gmk-center-pravitelstvennye-resheniya-po-eksportu-metalloloma-mogut-sozdat-novye-shemy-i-poteri-byudzheta-13558638.html) - Secondary source, reprint of GMK Center analytics. Confirms key figures: €27/ton, €5.4M budget, €17.2M excess profit, €80/ton, €16M, €6.6M, 11 companies, 90% of exports. ## FAQ ### What export quota for scrap metal is being discussed in the Ministry of Economy? A quota of 200,000 tons is under discussion, with distribution planned through auctions. The Ministry of Economy considers a starting price of €27 per ton to be sufficient. ### How much will the Ukrainian budget receive from selling the quota at €27 versus €80 per ton? According to GMK Center calculations, at €27/ton the budget will receive about €5.4 million, while at €80/ton it will get around €16 million. ### What is Cabinet Resolution No. 1795? Resolution No. 1795 of December 31, 2025, establishes a zero quota on scrap metal exports for the entire year of 2026, effectively banning its export. ### Why is scrap processing more profitable for the budget than direct export? According to GMK Center, processing one ton of scrap into finished steel products generates about 14,000–15,000 UAH in budget revenue, whereas direct export brings in only 50–104 UAH per ton.