Ukrainian steelmakers increased the export of pig iron by 14.4% m/m in May

In May 2023, Ukrainian steel companies increased the export of pig iron by 14.4% compared to the previous month – up to 96.5 thousand tons. In monetary terms, pig iron deliveries abroad during this period increased by 10.3% m/m – up to $40.76 million. This is evidenced by State Customs Service’s data.

Compared to May 2022, in May 2023, the export of pig iron in natural terms increased by 1.7%. The difference in indicators in monetary terms cannot be calculated due to the lack of data.

In January-May 2023, Ukraine exported 630.35 thousand tons of pig iron for $243.9 million. Export volumes increased by 23.% compared to the same period in 2022.

The main consumer of Ukrainian pig iron in January-May 2023 was Poland (63.76%). The share of Spain in the total volume of exports was 13.39%. The Czech Republic is in the third place with 10.3%. Before the war, more than half of the iron exported from Ukraine was consumed by the USA.

In April 2023, Ukrainian steelmakers increased pig iron production by 16.7% compared to the previous month – up to 544 thousand tons. Compared to April 2022, production increased by 87.6%. In January-April, 1.75 million tons of pig iron were produced (-54% y/y).

The low volumes of production of Ukrainian steelmakers are connected with logistical problems, the unfavorable situation of the world market, as well as with the destruction due to hostilities of the two largest steel enterprises of Ukraine – Azovstal and Ilyich Iron and Steel Works in Mariupol.

The only way to deliver Ukrainian pig iron abroad now is by rail. Due to the large influx of cargo, as the sea ports are blocked, Ukrainian Railways cannot process and transfer wagons with Ukrainian products to the European Union quickly and on time. In addition, logistics costs for the delivery of goods have increased at least by 2 times.

At the end of 2022, the Russian Federation began shelling the Ukrainian energy infrastructure, which led to a shortage of electricity in the power system and emergency shutdowns. Because of this, Ukrainian steel industry suffered greatly and was forced to suspend or significantly reduce production.

Now the situation with energy supply has stabilized, so the main problem for steelmakers remains the blockade of sea ports and logistical restrictions.

As GMK Center reported earlier, in 2022, Ukrainian steel companies reduced the export of pig iron by 59% compared to 2021 – to 1.32 million tons. The income of steelmakers from the export of pig iron last year amounted to $638.8 million, which is 61.1% less than in 2021. The main consumer of raw materials was the USA – 38.47% of the total volume of exports.