Ukraine exported 888 thousand tons of semi-finished products in the first half of the year

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

In January-June 2024, Ukrainian steel enterprises increased exports of semi-finished steel products by 61.6% compared to the same period in 2023, to 888.02 thousand tons. This is evidenced by data from the State Customs Service.

In June, exports of Ukrainian semi-finished products amounted to 119.81 thousand tons, down 35.2% month-on-month and 18% more than in the previous month. The export volumes are the lowest since March this year, when steelmakers shipped 86.99 thousand tons of the product abroad. In general, the average monthly exports in 2024 amounted to 148 thousand tons compared to 91.6 thousand tons in January-June 2023.

The main export destinations for Ukraine’s semi-finished steel products are Bulgaria – 308.03 kt over 6 months and 31.63 kt in June (-49.7% m/m), Poland – 96.95 kt and 8.2 kt (+139% m/m), respectively, and Italy – 74.1 kt over 6 months (not exported in June).

The deterioration in the industry’s performance is the result of a number of factors, including declining demand for products, problems with energy supply, shortage 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 from the EU at the European price to avoid forced electricity supply restrictions. Previously, the mandatory share of imports was 30%.

This decision of the Ukrainian government may lead to numerous negative consequences for domestic energy-dependent industrial companies, especially iron ore producers and steelmakers. For example, the share of electricity in iron ore concentrate production is 60%, pellets – 32%, EAF steel products – 24%, BF-BOF – 3.5%.

The rise in electricity costs is leading to a sharp increase in production costs, making it uneconomic to continue production, and some iron and steel companies warn that this could lead to a complete shutdown. In general, the restriction of electricity supplies will inevitably lead to a significant decline in production and exports.

Revenue from exports of semi-finished products in January-June 2024 increased by 47.3% y/y – to $439.9 million, while in June it decreased by 36.6% m/m and increased by 9.4% y/y – to $58.83 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 the pre-war year of 2021, shipments of semi-finished products abroad decreased by 82.2%, or 5.57 million tons. Revenues of domestic enterprises from the export of semi-finished products last year decreased by 48.9% compared to 2022, to $608.52 million.

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