Industrial production in Ukraine for 2022 decreased by 36.9%

In 2022, the volume of industrial production in Ukraine decreased by 36.9% compared to 2021. In December, the indicator decreased by 44.1% compared to the same month of the previous year and by 3.7% m/m. This is evidenced by State Statistics Service’s data.

Over the past year, production in steel industry and the production of finished steel products decreased by 62.5% compared to 2021, and in iron ore mining – by 61.7%.

In December 2022, production in steel industry fell by 79.8% compared to December 2021 and by 24.4% compared to the previous month. In the extraction of iron ores the indicator decreased by 83% y/y and by 15.7% m/m.

The worst month in terms of the dynamics of industrial production last year was March, when it fell by 53.7% after the Russian invasion. At the same time, a 2.9% increase was recorded in January, and a 10.1% decrease – in February. In the future, the indicator gradually recovered.

In the third quarter of 2022, before the emergence of energy supply problems due to Russian shelling, the upward trend continued. Power outages negatively affected the industry of Ukraine, and continued to limit the work of enterprises until the end of the year.

The low volumes of production of Ukrainian steelmakers are connected with logistical problems, the unfavorable situation of the world market, as well as with the destruction due to hostilities of the two largest steel enterprises of Ukraine – Azovstal and Ilyich Iron and Steel Works in Mariupol.

After the Russian invasion of Ukraine at the end of February 2022, Europe became the only market for Ukrainian products. At the same time, it is difficult and expensive to deliver goods by rail. The costs of steelmakers for the shipment of rolled products to customers increased at least 2 times, and the demand for products fell due to unfavorable market conditions.

Due to the above-mentioned factors, Ukrainian iron and steel enterprises operate with a low level of capacity utilization and even temporarily stop some of them. In addition, from October 2022, the Russian Federation was shelling the state electricity infrastructure of Ukraine, which causes problems with energy supply of regions and industry.

Now the situation with energy supply has stabilized, and the world markets are gradually recovering, which allows to increase steel production capacity.

As GMK Center reported earlier, in 2021 industrial production in Ukraine increased by 1.1% compared to 2020. During the year, production in steel industry and the production of finished steel products increased by 5.2%, iron ore mining – by 2.5%.