Via Metal Miner
In the first half of 2024, Ukraine’s steelmaking industry increased its output of finished and semi-finished products by about a third compared to the previous year. Production in the first half was 3.14 million tonnes, up 32% from an estimated 2.37 million tonnes, according to a July 15 report by Kyiv-based steelmaking association Ukrmetallurgprom.
The association also cited the State Customs Service of Ukraine as saying that steelmakers exported about 2 million tonnes, or 63.6% of their total exports. In contrast, Ukrmetallurgprom noted that its exports in the first half of 2023 were 1.25 million tonnes, or 52.9% of its total exports.
A source told Metal Miner that the price increase was due to the removal of import tariffs on Ukrainian steel into the European Union in early June 2022. The measure was specifically intended to support the Ukrainian economy following Russia’s invasion of Ukraine in February 2022.
Total steel production shows big changes
Of exports in the first half of 2024, semi-finished products accounted for more than 45% of exports. The Metallurgical Industrial Complex of Ukraine noted that this figure remained practically unchanged from the first half of 2023. According to the State Customs Service of Ukraine, the country’s main export markets were the EU-27 with 77.1%, the rest of Europe with 6.9% and Africa with 6.4%.
Billets are the main export for Ukrainian steelmakers. Due to its proximity to the Black Sea, many Turkish rolling mills buy semi-finished products to produce rebar, wire rod and commercial bars. But Ukrmetallurgprom also noted that exports of flat-rolled products increased by 41.7% in the first half of 2024, up from 33.6% in the first half of 2023.
The share of long steel products in exports fell sharply from about 20.5% of the total to just 12%. Flat steel products also dominate finished steel imports to Ukraine, accounting for just over 80% of the total, up from 18.3% for long steel in the first half of the year. These proportions have remained almost unchanged since the first half of 2023, according to Ukrmetallurgprom data.
Ferrexpo also reports an increase
Upstream, Ukrainian iron ore producer Ferrexpo reported an 83% increase in pellet production in the first half of 2024 compared to the previous year, thanks in part to the opening of the Black Sea maritime corridor.
“Since the opening of the route in late 2023, it is estimated that more than 800 vessels, including 90 loaded with iron products, have passed safely through it,” the company said in a statement on July 8. “Availability has improved as more shipowners are willing to charter vessels to Ukrainian ports. However, freight rates and insurance risk premiums remain high not only on the route to Ukraine, but also when transiting the Red Sea.”
Ferrexpo’s Premium Pellets Increase 55% in Impressive First Quarter Results
Ferrexpo noted that commercial production in the first half of the year exceeded 3.73 million tonnes, beating the more than 2.03 million tonnes recorded in the same period of 2023. Meanwhile, concentrate production rose 171% to 429,865 tonnes from 158,594 tonnes about a year ago, according to company data.
Ferrexpo also said its total pellet production increased 76% to 3.29 million tonnes from 1.87 million tonnes. Premium pellets increased 55% to 2.83 million tonnes from 1.82 million tonnes, while Ferrexpo’s “other pellets” category increased five-fold to 298,465 tonnes from 49,911 tonnes.
The war continues to cause problems for the steel manufacturing industry.
Ferrexpo’s latest first-half production total, despite a notable increase year-on-year, was a third lower than the 5.71 million tonnes the company reported for the first half of 2021. Of course, this was before Russia launched its invasion of Ukraine in February 2022.
Ferrexpo noted some challenges from the ongoing conflict with Russia, saying “other cost pressures continued to rise in the second quarter, in particular electricity prices.” The representative added that “attacks on energy generation and transmission infrastructure caused a significant reduction in Ukraine’s domestic electricity supply. Ferrexpo acted early to source alternative electricity from Ukraine’s European neighbors and so far disruptions to production activities have been minimal.”
Christopher Livituso
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