News Industry GMK Ukraine 12 December 2022
Pig iron smelting in November 2022 amounted to 335 thousand tons, and steel – 313 thousand tons
In November 2022, steel enterprises of Ukraine reduced the production of rolled products by 23.2% compared to October – to 222 thousand tons. In November 2022, the production output decreased by 85.8% year-on-year. This is evidenced by Ukrmetalurgprom’s data.
Pig iron smelting in November 2022 decreased by 4.01% compared to October – to 335 thousand tons. Steel production in November 2022 amounted to 313 thousand tons, which is 1.6% less compared to the previous month. On an annual basis, the volumes of steel and pig iron production fell by 81.8% and 80.4%, respectively.
In January-November 2022, Ukrainian steelmakers reduced the production of rolled products by 70.1% compared to the same period in 2021 – to 5.24 million tons. Pig iron and steel smelting during this period decreased by more than 68% y/y – to 6.14 million tons and 6.16 million tons, respectively.
The low production of Ukrainian steelmakers is connected with logistical problems, the unfavorable situation of the world market, as well as with the destruction due to hostilities of the two largest enterprises of Ukrainian iron and steel industry – Azovstal and Ilyich Iron and Steel Works of 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 steel to customers increased at least by 2 times, and the demand for products fell due to unfavorable market conditions.
Due to the above-mentioned factors, Ukrainian iron and steel enterprises operate with a low level of capacity utilization and even temporarily stop some of them. Zaporizhstal operates only two blast furnaces and is considering production cuts. Kametstal works with 80% of production capacity utilization, and ArcelorMittal from July 2022 transferred a large part of its employees to 2/3 workload schedules.
In addition, on October 10, 2022, the Russian Federation shelled the state electricity infrastructure of Ukraine, which caused problems with energy supply of regions and industry.
As GMK Center reported earlier, in 2021 Ukrainian steelmakers increased steel production by 3.6% compared to 2020 – up to 21.37 million tons. The production of rolled products in Ukraine in 2021 increased by 3.5% y/y – up to 19.08 million tons, and pig iron production increased by 3.6% y/y – up to 21.17 million tons.