Ukraine’s only graphite plant suspends operations

Rising costs and falling prices in the global market made Zavalivsky graphite unprofitable

Ukraine’s only natural graphite mining company, Zavalivsky Graphite, which has been operating since 1934, has suspended its operations. This was the result of a sharp rise in energy and logistics costs and problems in international markets, where graphite prices continue to fall, according to the National Association of Mining Industries of Ukraine.

One of the key reasons for the shutdown was the high cost of electricity and outdated production infrastructure, which requires significant investment in modernization. These factors, along with rising logistics costs, have significantly increased production costs, making it impossible for the company to maintain stable operations.

The situation is further complicated by China’s dumping policy, which actively supplies cheap graphite to the global market, displacing competitors. As a result, prices for commercial graphite fell to a level where Zavalivsky Graphite could not ensure profitability.

The shutdown will have serious consequences for the Ukrainian industry, which depends on graphite in key sectors. This includes electrode production, the automotive industry, electronics, and even the defense sector. The country will now have to look for alternative sources of raw materials abroad, which could lead to higher prices and new economic challenges.

“The recent events are a clear signal of the need to review not only the state’s tariff policy, but also to implement more effective strategies to support strategic enterprises and international investment partnerships. This is especially important in the industries that ensure the state’s defense capability and are the basis for the future revival of Ukraine,” the association summarizes.

The pressure of high energy and logistics costs, along with weakening demand on the global market, is also having a negative impact on Ukraine’s steel industry. It is becoming increasingly difficult for the heavy industry to compete in both domestic and foreign markets due to rising production costs and an influx of cheap Asian imports.

In January-November 2024, Ukraine exported 2.87 thousand tons of graphite, while imports amounted to 0.1 thousand tons.