Ukraine: Ferro alloy exports fall 29% m-o-m in October due to strikes in key regions

Ukrainian ferro alloys exports dropped in October 2023. In this month they decreased their exports of ferro alloys by 29% m-o-m to 12,990 t in October 2023, compared to September.

Compared to October 2022, the exports y-o-y of ferro alloys in October 2023 scaled up by 38%. However, the revenue from these exports also went down by 17%. On the other hand, from January to October 2023, Ukraine exported a total of 334,010 t.

Poland was the biggest buyer of Ukrainian ferro alloys, accounted for 54% of the total exports in terms of money. Turkiye came in second with a 14% share, followed by the Netherlands with 9%.

In the first quarter of 2023 (April-June), the production of ferro alloys in Ukraine decreased by 2.7 times compared to the same period last year due to the Russian missile strikes on Ukrainian energy infrastructure at the end of 2022. These strikes resulted in the industry's enterprises stopping work temporarily, partially or completely.

Meanwhile, in 2022, the ferroalloy industry witnessed a setback. They reduced their exports by 48% compared to the previous year. It was a difficult time for the industry. In the same year, the factories produced 32% less ferroalloys compared to the previous year.

While some mining and processing plants like NFP, ZFP, Marhanets, and Pokrovsk were able to resume operations after the power supply stabilised, Pobuzhsky Ferronickel Plant suspended its production since November 2022 because the company depends on imported raw materials, which cannot be reliably transported due to the blockade of seaports.

Why exports decreased?

Suspension of production: In early November 2023, ferroalloy plants that had previously resumed operations announced a suspension of production until at least spring 2024. Marganetsk, Pokrovsk, ZFP, and NFP stated that this decision was made due to the risk of winter power outages and water supply problems. However, they assured that there are enough raw materials and products in warehouses to meet consumer demands.

Demand declined: As a result of the production shutdown and a seasonal downtick in demand from export consumers, the export of Ukrainian ferro alloy products is expected to continue declining until the end of the year. This poses a challenge for the industry.

Source: GMK Center