Authored by Christopher Rivituso via AGMetalMiner.com,
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Ukrainian steel production and exports increased by one-third in the first half of 2024 compared to the same period in 2023.
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The removal of import duties on Ukrainian steel into the European Union contributed to the surge in exports.
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Ferrexpo, a Ukrainian iron ore producer, also reported an 83% year-on-year increase in its pellets production during the same period.
For the first half of 2024, Ukrainian steel manufacturing increased finished and semi-finished production by about one-third year on year. According to a July 15 report from Kyiv-based steelmaking association Ukrmetallurgprom, volumes for the first six months came to 3.14 million metric tons, representing a 32% rise from an estimated 2.37 million metric tons.
The association also cited the State Customs Service of Ukraine as saying that steelmakers exported almost 2 million metric tons, or 63.6% of that total. In comparison, Ukrmetallurgprom pointed out that exports in H1 2023 were 52.9% of the total at 1.25 million metric tons.
One source told MetalMiner that the removal of import duties on Ukrainian steel into the European Union in early June 2022 was behind the increases. The move specifically intended to aid the economy of Ukraine following Russia’s invasion of the country in February 2022.
Steel Manufacturing Totals Indicate Significant Changes
Semi-finished products comprised over 45% of the exports within H1 2024 exports. Ukrmetallurgprom noted that this figure remained practically unchanged from H1 2023. According to the State Customs Service of Ukraine, the country’s main export markets were EU-27 at 77.1%, other Europe at 6.9%, and Africa at 6.4%.
Billet is a primary export for steel manufacturers in Ukraine. Due to its proximity to the Black Sea, many Turkish rollers purchase the semi-finished product to make rebar, wire rod, and merchant bar. However, Ukrmetallurgprom also noted that flat-rolled products totaled 41.7% of exports in H1 2024, an increase from the 33.6% seen in H1 2023.
The share of exports represented by longs products declined sharply from almost 20.5% to just 12% of the total. Flat products also dominated finished steel imports into Ukraine at slightly over 80% of the total, against 18.3% for longs in H1. Data from Ukrmetallurgprom showed that those percentages remained largely unchanged since H1 2023.
Ferrexpo Also Reported Increases
Upstream, Ukrainian iron ore producer Ferrexpo reported an 83% year-on-year increase in its pellets production for the first six months of 2024, thanks in part to the opening of the Black Sea maritime corridor.
“Since the corridor was opened in late 2023, it is estimated that over 800 ships have safely passed through, including 90 with ferrous commodities,” the company said on July 8. “The increased number of owners prepared to charter vessels to Ukrainian ports resulted in improved availability. However, freight rates and insurance risk premiums remain high, not only for the passage to Ukraine, but also through the Red Sea.”
Ferrexpo’s Premium Pellets Surge 55% in Stunning H1 Performance
Ferrexpo noted that total commercial production for H1 exceeded 3.73 million metric tons, against more than 2.03 million metric tons over the same time in 2023. Meanwhile, company data showed that concentrate production was up 171% to 429,865 metric tons from 158,594 metric tons around a year ago.
Ferrexpo also indicated that total pellet production rose 76% to 3.29 million metric tons from 1.87 million metric tons. Premium pellets were up 55% to 2.83 million metric tons from 1.82 million metric tons, while Ferrexpo’s “Other Pellets” category showed a five-fold rise to 298,465 metric tons from 49,911 metric tons.
The War Continues to Cause Problems for Steel Manufacturing
Despite the notable year-on-year increases, Ferrexpo’s latest H1 total production figure came in one-third lower than the 5.71 million metric tons the company reported for its H1 2021 results. This, of course, was before Russia began its invasion of Ukraine in February 2022.
Ferrexpo noted several challenges due to the ongoing conflict with Russia, stating, “Other cost pressures continue to rise during the second quarter, especially electricity prices.” Representatives added that, “Attacks on energy generation and transmission infrastructure have greatly reduced Ukraine’s domestic power supply. Ferrexpo moved early to source alternative power from Ukraine’s European neighbors, which has so far resulted in minimal disruption to its production activities.”
Tyler Durden
Mon, 07/29/2024 – 05:00
