Steel consumption in Ukraine in 2019 remained the same

Steel consumption in Ukraine in 2018–2019 stagnated. In 2019, the market volume remained at the past year’s level, according to CIS Steel Market Outlook 2015–2019 prepared by GMK Center analysts.

Firstly, the construction industry is developing due to less steel-intensive sectors, while the growth in construction (+ 23.6%) recorded by statistical authorities was not reflected in the growth in steel consumption.

Secondly, a global trend towards a decline in industrial production affected Ukraine (-0.5%).

Thirdly, 2019 was the year of the presidential and parliamentary elections, which made many companies postpone investment plans for a while.

Multidirectional dynamics were observed for various products in 2019. Specifically, rebar consumption increased by 3.2%, whereas demand for wire rod decreased by 1.7%. The market for structural shapes slumped (-12.8%).

Consumption of HDGC (+ 3.8%) and organic coated coils (+ 3.5%) grew. Demand for these products is mainly covered by imports. In general, the share of imports in the Ukrainian market remained at the past year’s level, around 30%.

Consumption of seamless pipes decreased by 17.3% in 2019 because of a change in investment policy of the state-owned oil and gas company, Ukrgasvydobuvannya. The company announced a cut in investment in new drilling and, as a result, reduced purchases of pipes by 60%.

Consumption of welded pipes significantly increased. Market participants have noted an increase in demand for welded hollow sections in the construction sector.

Steel consumption per capita in Ukraine was at the level of 129 kg annually in 2019.

In general, the CIS market showed good dynamics in 2015–2019. A 7.9% increase in steel consumption in Russia in 2019 prompted a 6% increase to 60.8 million tons in the CIS market. However, according to the World Steel Association, steel consumption in the CIS will fall by 10.3% in 2020.