Ukrainian Railways (UZ) has canceled auctions for the sale of scrap on the Prozorro.

Sale platform, which were held in early February 2022 but were frozen with the start of the Russian invasion. This is stated in the decision of the Department of Property Policy of Ukrainian Railways.50 lots from the sale of scrap in the amount of 33.8 thousand tons for a total amount of almost UAH 292.5 million were canceled. "Due to the occurrence of force majeure circumstances that led to a violation of the terms of the auctions, the loss of the property that is the subject of the auctions, taking into account the winners' requests for their cancellation and the explanations of the administrator of Prozorro.

Sale, based on the decision taken by the Commission of Ukrainian Railways on the procurement and use of ferrous and non-ferrous scrap metal dated 16.04.2024 to cancel the electronic auctions announced in Prozorro.

Sale in accordance with the decision of the Board of JSC "Ukrzaliznytsia"," the document says.

Earlier, Ukrainian Railways stopped selling scrap in the fall of 2023 due to alleged bureaucratic obstacles in the regulatory framework. Ukrainian metallurgists, the main consumers of scrap in the domestic market, have repeatedly called on UZ to resume such auctions due to the urgent need for raw materials to increase production.

UZ's withdrawal from the scrap metal market will have a negative impact on the Ukrainian steel industry, as the railroad operator is the main source of raw materials for the market. At the same time, the collection of raw materials from alternative sources is complicated due to the hostilities. An additional negative factor is the unimpeded export of this raw material, with 15.5% of the raw materials harvested being exported without paying any duty to the state budget in January-April 2024.As domestic steelmakers increase production volumes, the industry may face a shortage of scrap, a raw material that is strategic for achieving carbon neutrality and industry operations.