Ukrainian steelmakers increased the export of pig iron by 31% m/m

In February 2023, Ukrainian steel companies increased the export of pig iron by 31.1% compared to the previous month – up to 177.08 thousand tons. In monetary terms, deliveries of pig iron abroad during this period increased by 34.1% m/m – up to $65.03 million. This is evidenced by State Customs Service’s data.

Compared to February 2022, in February 2023, steelmakers of Ukraine reduced the revenue from the sale of pig iron by 42.9%. It is impossible to calculate the difference in export volumes in natural terms due to the lack of data.

In January-February 2023, Ukraine exported 312.15 thousand tons of pig iron worth $113.55 million. The revenue of steelmakers decreased by 44.9% compared to the same period in 2022.

The main consumer of Ukrainian pig iron in January-February 2023 was Poland (48.87%). The share of Spain in the total volume of exports was 27.24%. Italy is in the third place – 12.48%. Before the war, more than half of the iron exported from Ukraine was consumed by the USA.

In February 2022, Ukrainian steelmakers reduced iron smelting by 8.1% compared to the previous month – to 353 thousand tons. Compared to February 2022, production decreased by 76.5%. In January-February, 737,000 tons of pig iron were produced (-77.6% 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 2 times.

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.

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 2021 pig iron exports from Ukraine increased by 4% compared to 2020 – up to 3.24 million tons. In monetary terms, pig iron deliveries abroad in 2021 increased by 78.1% y/y – up to $1.64 billion.

In 2021, Ukraine sold more than half of its pig iron to the USA (53.6%). In 2021, Italy was in the second place by the volume of supplies of Ukrainian pig iron (22.1%), and Turkiye – in third place (9.7%).