UZ reduced the transportation of steel products by 9.2% m/m in October 2022

In October 2022, Ukrzaliznytsia (UZ) reduced the transportation of steel products by 9.2% compared to September 2022 – to 628.4 thousand tons. Compared to October 2021, transportation decreased by 62.3%. GMK Center was informed about this by UZ press service.

Export transportation of ferrous metals in October 2022 decreased by 13.4% compared to the previous month – to 330.6 thousand tons. Their share in the total volume of steel transportation is 53%. Domestic transportation accounts for 43%. During the month, 268.7 thousand tons of steel products were transported in domestic traffic, which is 10.4% less month-on-month.

“The decrease in transportation took place in domestic traffic and for export. The largest decrease occurred with Kametstal (currently 30% of capacity is used), Nikopol Ferroalloy Plant (50% of capacity), and ArcelorMittal (50% of capacity, taking into account the drop in production volumes, the increase in the cost of electricity, as well as the fullness of warehouses),”  reports UZ.

In January-October 2022, transportation of steel products by rail decreased by 54.2% compared to the same period in 2021 – to 8.28 million tons. Export transportation during this period amounted to 5.03 million tons, which is 61.4% less than January-October last year.

In general, in January-October 2022, Ukrzaliznytsia reduced cargo transportation by 49.8% y/y – to 129.8 million tons. In October, UZ transported 12.06 million tons of cargo, which is 3.3% more than in September 2022, and 58% less than in October 2021.

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 and unfavorable market conditions. Due to the drop in prices for ferrous metals and a significant increase in the cost of delivering products to consumers, Ukrainian mining and processing plants are forced to stop or reduce the production of iron ore.

ArcelorMittal, according to the CEO Mauro Longobardo, operates at 20-25% of pre-war capacities, but even these indicators are difficult to maintain due to shelling by Russian troops of Ukraine’s energy infrastructure. Due to power outages, the plant suspended steel production from November 24, 2022.

Kametstal from November 23, 2022 temporarily suspended production due to power outages, while Zaporizhstal continues to operate at reduced capacity.

In 2021, Ukrazliznytsia increased railways shipment of finished steel products by 5.9% compared to 2020 – up to 21.7 million tons. Export transportation increased by 3.8% by 2020 – up to 15.7 million tons.