Ukrainian iron and steel industry is
significantly affected by problems with electricity supply and disruptions in
logistics
In autumn, the fall in the production of both steel and
iron ore accelerated in Ukraine – this is related to the deterioration of
demand in the European market and problems with electricity supply due to
systematic Russian missile attacks.
In 11 months of 2022, the production
of steel products decreased:
·
pig iron – by 68.4%;
·
steel – by 68.6%;
·
rolled steel – by 70.1%.
In November, there were produced 313
thousand tons of steel, which is 82.0% less than in the same period of 2021.
The monthly production of iron ore products fell by more than 90% in autumn
compared to the pre-war period.
With the beginning of the war, Ukraine lost two powerful
steel plants in Mariupol, which produced 40% of the country’s steel. Other
factories have reduced the utilization of production capacities by 50% or more.
Currently, the production of iron ore concentrate is almost completely stopped.
Due to power outages, underground mines cannot fully operate.
Reduction
of exports
The export of iron ore products for 11 months of 2022
decreased by 42.9% y/y (to 23.2 million tons). Up to 95% of iron ore exports go
to EU countries.
Export of pig
iron for 11 months of 2022 fell by 57.8% y/y (to 1.23 million tons),
semi-finished products – by 70.6% y/y (to 1.82 million tons). During
January-November 2022, 1.6 million tons of flat rolled products (-70.9% y/y)
and 0.6 million tons of long-length products (-66.7% y/y) were exported.
The decrease in the export of steel products from Ukraine
negatively affected global supply chains. Before the war, the EU imported more
than a third (34%) of slabs from Ukraine. With the onset of a full-scale
invasion, these supplies ceased, and European factories had to find other
suppliers. Due to expensive logistics, the export of iron ore to China stopped
– before the war, China accounted for 40-45% of Ukrainian iron ore exports.