Ukrainian steelmakers reduced the export of pig iron by 38.6% m/m in April

Ukrainian steel companies in April 2023 reduced the export of pig iron by 38.6% compared to the previous month – to 84.33 thousand tons. In monetary terms, the supply of pig iron abroad in this period fell by 29.8% m/m – to $36.95 million. This is evidenced by State Customs Service’s data.

Compared to April 2022, in April 2023 exports of pig iron in physical terms increased by 7.9%, and in monetary terms – by 4.6%

In January-April 2023, Ukraine exported 533.84 thousand tons of pig iron for $203.12 million. The revenue of steelmakers decreased by 7.7% compared to the same period in 2022, but in real terms the figure increased by 18.3% y/y.

The main consumer of Ukrainian pig iron in January-April 2023 was Poland (60.42%). The share of Spain in total exports amounted to 15.23%. In the third place is the Czech Republic – 9.84%. Before the war, more than half of the pig iron exported from Ukraine was consumed by the United States.

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 energy system and emergency shutdowns. Therefore, the industry of Ukraine, in particular steel sector, suffered greatly and was forced to suspend or significantly reduce production.

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

As GMK Center reported earlier, in 2022, Ukrainian steel companies reduced pig iron exports 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 United States was the main consumer of raw materials – 38.47 of the total exports.