Ukraine’s ferroalloy industry exported 53 thousand tons of products in January-August

Shipments of ferroalloys are gradually recovering after restarting part of the capacities, but are still down 83.1% y/y

In January-August 2024, Ukraine’s ferroalloy industry reduced exports by 83.1% compared to the same period in 2023, to 52.81 thousand tons (312.44 thousand tons in January-August 2023). This is evidenced by the data of the State Customs Service of Ukraine.

In August, Ukrainian producers exported 13.11 thousand tons of ferroalloys, down 15.3% month-on-month and 1% more than in the previous month. Export volumes have been declining month-on-month for the second month in a row after 4 months of growth.

In May-August, export shipments of ferroalloys from Ukraine began to approach last year’s figures, while in January-April, exports were on the verge of stopping, not exceeding 0.1-0.3 thousand tons.

The main consumers of the products are Poland – 11.53 thousand tons for 8 months, and 1.88 thousand tons in August (-40.1% m/m), Turkey – 15.3 thousand tons and 3.02 thousand tons (-54.3% m/m), respectively, as well as Italy – 9.65 thousand tons and 3.1 thousand tons (-12.6% m/m), respectively.

Ferroalloy shipments have resumed due to the partial reopening of Zaporizhzhia Ferroalloy Plant (ZFP) in May. As previously reported, the company is operating two furnaces, which is only 7% of its total capacity, and has no visible plans to increase its utilization. Since the end of June, the NFP has also been operating at a minimum level. The companies are currently working with the raw material stocks left over from last November and the electricity they can get. Pokrovske Mining, Marganets Mining, and Pobuzhsky Ferronickel Plant (PFP) are idle.

At the same time, Ukraine’s heavy industry is facing many challenges, including a decline in demand for products, problems with energy supply, a shortage of personnel due to mobilization, etc. The ferroalloy industry is particularly pressured by high electricity tariffs and problems with electricity shortages, as the production of ferroalloys is an energy-intensive process.

Rising electricity costs are driving up production costs, making it uneconomical to continue production, and some mining and metals 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 ferroalloys in 8 months of 2024 decreased by 76.5% y/y – to $63.8 million, while in August it increased by 50.5% y/y and decreased by 16.1% m/m – to $15.67 million.

As GMK Center reported earlier, in 2023, Ukraine’s production of ferroalloys decreased by 57.4% compared to 2022. Exports fell by 4.9% y/y – to 344.2 thousand tons. Compared to pre-war 2021, shipments of ferroalloys abroad decreased by 48.5%, or 324.4 thousand tons. Poland was the largest consumer of Ukrainian-made ferroalloys in 2023, accounting for 52.8% in monetary terms. Turkey accounted for 14.1% of export shipments and the Netherlands for 8.5%.

In 2024, according to Sergiy Kudryavtsev, Executive Director of the Ukrainian Ferroalloy Producers Association (UkrFA), the state of Ukraine’s ferroalloy industry will depend on three factors: shelling, logistics, and available electricity. In particular, in January-August, production decreased by 4.6 times y/y – to 41.05 thousand tons.