In January-September 2022, Ukrainian steel companies reduced steel production by 66.08% compared to the same period in 2021 – to 5.53 million tons. Thus, Ukraine fell to 23rd place in the world ranking of steel producers compared to 14th place in January-September 2021.
This is reported by Ukrmetalurgprom with the reference to World Steel Association’s data.
The top three leaders in steel production in the world include:
Pig iron production in Ukraine for January-August 2022 amounted to 5.46 million tons, which is 66.2% less than in the same period of 2021. The country took the 14th place among pig iron producers in the world. At the same time, in January-August 2021, Ukraine took 10th place with an indicator of 16.15 million tons.
The leaders in pig iron production are China, India and Japan – 656.1 million tons (-2.5% y/y), 90.2 million tons (+2.9% y/y), and 48, 8 million tons (-7.76% y/y), 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 the energy supply of the regions. Due to this, the iron ore company Ferrexpo decided to suspend production at its enterprises in the Poltava region, and ArcelorMittal Kryvyi Rih reduced current production volumes.