Ukrainian iron and steel industry reduced iron ore exports by 8.7% m/m in May

In May 2023, Ukrainian mining companies reduced iron ore exports by 8.7% compared to April 2023 – to 1.52 million tons. In monetary terms, iron ore exports for the month decreased by 14.3% m/m – to $161 million. This is evidenced by State Customs Service’s data.

It is impossible to compare the indicators of May 2023 with the similar month of 2022 due to the lack of data.

During January-May 2023, domestic mining companies shipped 6.85 million tons of iron ore worth $752.5 million for export.

In January-May 2023, Slovakia consumed the most Ukrainian iron ore – 29.1%. The Czech Republic is in the second place with 25.1%, and Poland is in the third place with 21.4%. At the same time, before the start of the war in Ukraine, the main consumer of Ukrainian iron ore was China, but due to the blockade of Ukrainian ports, the delivery of raw materials to the People’s Republic of China became uncompetitive.

After the invasion of Russia on the territory of Ukraine, domestic steel companies reduced the export of products to a minimum due to the blockade of sea ports. Steelmakers are looking for ways to ship their products through the railway infrastructure, but due to the influx of cargo, Ukrzaliznytsia and border crossings are unable to cope. In addition, this method of cargo delivery is unprofitable due to the two-fold increase in costs.

In addition, at the end of 2022, the Russian Federation began shelling Ukraine’s energy infrastructure. The country’s industry lost the possibility of normal operation, because the power system generated significantly less electricity than was needed. Thus, steelmakers suspended work or significantly reduced production.

At the beginning of 2023, the situation stabilized, steel plants began to restore suspended capacities and increase production, but in order to return to pre-war levels, the unblocking of seaports is required.

As GMK Center reported earlier, in 2022 Ukraine reduced the export of ferrous metals by 45.9% compared to 2021 – to 23.98 million tons. In monetary terms, the indicator fell by 57.8% y/y – to $2.91 billion.

The major iron ore producers in Ukraine include: Ingulets GOK, Kryvyi Rih Iron Ore Plant, Poltava Mining, Northern GOK, Central GOK, Southern GOK, ArcelorMittal Kryvyi Rih, Sukha Balka GOK and Zaporizhzhia Iron Ore Plant.