Ukraine exported 1.11 million tons of semi-finished products in January-July

The main share of products was shipped to Bulgaria, Poland and Egypt

In January-July 2024, steel enterprises of Ukraine increased the export of steel semi-finished products by 68.1% compared to the same period in 2023 – up to 1.11 million tons. This is evidenced by the data of the State Customs Service.

In July, the export of Ukrainian semi-finished products amounted to 219.32 thousand tons, which is 83.1% more compared to the previous month, and 100.7% y/y. Export volumes are the maximum since January 2024, when steelmakers shipped abroad 222.22 thousand tons of relevant products. In general, the average monthly export during 2024 is 158.2 thousand tons compared to 94.1 thousand tons in January-July 2023.

The main export destinations of steel semi-finished products from Ukraine are Bulgaria – 377.04 thousand tons in 7 months and 69 thousand tons in July (+118.1% m/m), Poland – 101.6 thousand tons and 4, 64 thousand tons (-43.3% m/m), respectively, Italy – 84.02 thousand tons and 9.9 thousand tons (not exported in June), as well as Egypt – 148.59 thousand tons and 82.37 thousand tons (+24.4% m/m). A sharp increase in the consumption of semi-finished products of Ukrainian production by Egyptian consumers became the main driver of the growth of the indicator in July.

At the same time, the annual results of the industry are under significant pressure from a number of factors, including fluctuations in global demand for products, problems with energy supply and high electricity prices, lack of personnel due to mobilization, etc.

In particular, on June 1, 2024, CMU Resolution No. 661 amended the «Regulation on the peculiarities of electricity imports under the legal regime of martial law in Ukraine,» which obliges Ukrainian producers to buy at least 80% of electricity in the EU at a European price in order to avoid forced restriction of electricity supply. Previously, the mandatory share of imports was 30%.

Such a decision of the Ukrainian government can lead to numerous negative consequences for domestic energy-dependent industrial companies, especially for producers of air defense systems and steelmakers. Thus, the share of electricity in the production of iron ore concentrate is 60%, pellets – 32%, steel products EAF – 24%, BF-BOF – 3.5%.

Rising electricity costs lead to a sharp increase in cost, which makes the continuation of production economically unprofitable, and some iron and steel enterprises warn that this may entail a complete shutdown of production. In general, limiting the supply of electricity will inevitably lead to a significant decrease in production and exports.

Revenues from exports of semi-finished products for January-July 2024 increased by 55.1% y/y – up to $549.28 million, and in July – by 85.9% m/m and 97.2% y/y – up to $109.37 million.

As GMK Center reported earlier, in 2023, Ukraine reduced exports of semi-finished products by 36.7% compared to 2022 – to 1.203 million tons. Compared to pre-war 2021, shipments of semi-finished products abroad decreased by 82.2%, or 5.57 million tons. The revenue of domestic enterprises from exports of semi-finished products over the past year decreased by 48.9% compared to 2022 – to $608.52 million.

The largest consumers of semi-finished products of Ukrainian production in 2023 were Bulgaria – 36.7%, Poland – 23% and Italy – 9.6%.