(с) shutterstock.com

In January-August 2022, Ukrainian mining companies sent 18.7 million tons of iron ore abroad by rail

Ukrzaliznytsia (UZ) in August 2022 reduced export transportation of iron and manganese ores by 10.7% compared to the previous month – to 1.4 million tons. Transportation of iron ore decreased by 2.5 times compared to August 2021. UZ’s press service reported about it to the GMK Center.

In January-August 2022, Ukrainian mining companies shipped 18.7 million tons of iron ore abroad by rail. This is 36.7% less than in the same period of 2021.

In connection with the start of the war between Russia and Ukraine, since March 2022, there has been a significant decrease in the rail transportation of iron ore:

  • March – 2.06 million tons (by 81% less y/y);
  • April – 2.36 million tons (-62.1%);
  • May – 2.06 million tons (-88.9%);
  • June – 1.54 million tons (2.4 times less);
  • July – 1.57 million tons (2.5 times less);
  • August – 1.4 million tons (2.5 times less).

In general, since the beginning of the war (March-August 2022), Ukrzaliznytsia has transported 11.09 million tons of iron ore, while in January-February 2022 this index was 7.64 million tons. The average monthly index of transportation in March-August 2022 fell to 1.8 million tons from 3.8 million tons in January-February 2022.

In 8 months of 2022, UZ transported 106.1 million tons of cargo, which is 47.4% less than in January-August 2021. Export transportations for this period decreased by 41.6% y/y – to 40.87 million tons. Their share in the total volume of transportation is 38.5%.

As GMK Center reported earlier, Ukrzaliznytsia in August 2022 reduced the export transportation of steel products by 11% compared to the previous month – to 275 thousand tons. In January-August 2022, Ukrainian steelmakers shipped 4.3 million tons of steel abroad by rail. This is 59.3% less than in the same period of 2021.

As GMK Center wrote before, in August 2022, Ukrainian mining companies reduced iron ore exports by 7.8% compared to the previous month – to 1.44 million tons. In monetary terms, iron ore exports for this period decreased by 13.2% m/m – to $172.2 million.

After the invasion of Russia on the territory of Ukraine, domestic steel companies reduced the export of products to a minimum due to the blockade of sea ports. Steelmakers are looking for ways to ship their products through the railway infrastructure, but due to the influx of cargo, Ukrzaliznytsia and border crossings are unable to cope. In addition, this method of cargo delivery is unprofitable due to the two-fold increase in costs.

Problems with logistics are superimposed on unfavorable market conditions – iron ore prices are falling. As a result, Ukrainian mining and processing plants are forced to completely stop or reduce the iron ore production.

In 2021, UZ reduced transportation of iron and manganese ores by 2.7% compared to 2020 – to 77.6 million tons. Export transportation in 2021 fell by 3% y/y – to 44.6 million tons, and domestic – increased by 3.1%, up to 27.7 million tons.