Ukrainian Railways plans to sell 31,000 tons of scrap this week

The resumption of trading in 2025 took place against the backdrop of a deterioration in the financial condition of UZ.

SEATTLE (Scrap Monster): This week, Ukrainian Railways JSC (UZ) will announce 80 new auctions for the sale of scrap with a total volume of about 31,000 tons. The total initial cost of the lots reaches UAH 203 million. This is stated in a press release from the railway operator.

The company notes that before launching the auction, it consulted with potential buyers, analyzed the results of similar auctions, and took into account official market data. Based on this, the starting price of scrap was revised and now stands at UAH 6,400/ton.

UZ expects that the price will rise due to high competition during the auctions. According to the company, the new approach should create more comfortable conditions for market participants and increase the profitability of sales. One of the steps in this direction was to reduce the volume of scrap in individual lots. This will attract a wider range of buyers, including medium and small steel traders.

The revised starting price is based on an analysis of previous auctions in the Prozorro.Sales system, as well as data from the state-owned enterprise Ukrpromzovnishchexpertiza. Ukrainian Railways explains that the rate set back in April no longer corresponded to current market conditions, which is why it was brought into line with the current situation.

An additional incentive for participants will be the new tariff for scrap loading. The company has reduced it to UAH 706/t (including VAT), which should reduce buyers’ operating costs and make participation in the auction more attractive.

Thus, Ukrainian Railways expects a noticeable revival of activity at auctions and hopes that the updated structure of lots and transparent pricing policy will contribute to the formation of a fair market price.

It should be noted that the scrap market in Ukraine is experiencing a systemic crisis: raw material procurement has fallen threefold due to the war, and a significant part of it is additionally “washed out” by exports. In such conditions, Ukrainian Railways’ scrap is of strategic importance for steel enterprises. Before the war, Ukrainian Railways provided about 10-15% of the nominal sales volume on Prozorro, although actual deliveries accounted for only up to 6% of the market. At the same time, after a legal conflict in the fall of 2023, the company suspended auctions for a year and a half, which further exacerbated the shortage of raw materials.

The resumption of trading in 2025 took place against the backdrop of a deterioration in the financial condition of UZ. The government was forced to urgently allocate more than UAH 4.3 billion to the railway operator for salary payments, and the sale of scrap became one of the key internal sources of revenue. Although Ukrainian Railways had accumulated large stocks of scrap — more than 95,000 tons ready for sale and up to 131,000 tons in the future — actual shipments in June-August fell to 10,000 tons, the lowest level in seven years. This was due to systemic problems in the organization of auctions, pricing, and the terms of sale of raw materials. To resolve the differences with market participants, Ukrainian Railways held a meeting to gather suggestions and complaints, which may improve activity and sales of raw materials in the future.

 Courtesy: www.gmk.center