Steel production

In the month, iron smelting amounted to 240,000 tons, and steel – to 284,000 tons

In January 2023, steel enterprises of Ukraine reduced the production of rolled products by 84.6% compared to the same month of 2022 – to 257 thousand tons. This is evidenced by the Ukrmetalurgprom’s data.

Pig iron production in January 2023 decreased by 84.6% compared to January 2022 – to 240,000 tons. Steel production in this period amounted to 284,000 tons, which is 84.7% less y/y.

Compared to December 2022, the production of rolled products in January 2023 increased by 2.4 times, steel – by 2.7 times, and pig iron – decreased by 2.8%.

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. 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 2022 Ukrainian steelmakers reduced steel production by 70.7% compared to 2021 – to 6.26 million tons. The production of rolled products fell by 72% y/y – to 5.35 million tons, and iron smelting fell by 69.8% y/y – to 6.39 million tons.