Ukrainian steelmakers increased the export of semi-finished products by 80.6% m/m in February

In February 2023, Ukrainian steel enterprises increased the export of semi-finished products by 80.6% compared to the previous month – up to 69.24 thousand tons. The revenue of producers from exports for the month increased by 73.1% m/m – up to $36.18 million. This is evidenced by State Customs Service’s data.

Compared to February 2022, in February 2023 steel enterprises of Ukraine reduced revenue from the sale of semi-finished products by 87%. 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 107.58 thousand tons of semi-finished products worth $57.07 million. The revenue of steelmakers from the export of slabs and billets decreased by 90.1% compared to the same period in 2022.

The main importers of semi-finished products from Ukraine in January-February 2023 were Poland (56.19% of deliveries in monetary terms), Bulgaria (10.22%), and Denmark (9.12%).

In February 2023 Ukrainian steelmakers increased the production of rolled products by 30% compared to January 2023 – up to 334,000 tons. Pig iron smelting for the month decreased by 8.1% m/m – to 353,000 tons, and steel production – increased by 49.3% m/m, up to 424,000 tons.

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.

After the Russian invasion of Ukraine at the end of February 2022, Europe became the only market for Ukrainian products. At the same time, it is difficult and expensive to deliver goods by rail. The costs of steelmakers for the shipment of rolled products to customers increased at least 2 times, and the demand for products fell due to unfavorable market conditions. The shelling of Ukraine’s energy infrastructure by Russian forces, which forced steelmakers to reduce and stop production in order to preserve capacity, were also added to the main problems.

At the beginning of 2023, the situation in the industry stabilized, as the demand for steel and raw materials began to recover, and shelling of the energy system of Ukraine became an increasingly rare phenomenon. Amid this, steel plants began to restore suspended capacities and increase production, but to return to pre-war levels, seaports need to be unblocked.

As GMK Center reported earlier, in 2022 export of semi-finished products from Ukraine decreased by 72% compared to 2021 – to 1.89 million tons. In monetary terms, the export of semi-finished products fell by 70.9% y/y last year – to $1.19 billion. The main importers of Ukrainian semi-finished products in 2022 were Bulgaria (25.55%), Poland (13.97%) and Italy (12.13%).