Ukraine's ferro alloys exports reach around 40,000 t during January-July 2024

GMK Center: Between January and July 2024, Ukraine's ferro alloy industry saw a significant decline in export volumes, which plummeted by 86.7% compared to the same period in 2023, reaching only 39.69 thousand tonnes (t), down from 299.46 thousand tonnes in the previous year, according to the State Customs Service of Ukraine. Although shipments are gradually recovering after some production facilities restarted, they remain far below last year's levels.

In July 2024, Ukrainian ferro alloy exports totalled 15.48 thousand t, representing an 11.7% m-o-m decline and a 34.4% drop y-o-y. This marked the first monthly decrease in four months. From May to July, exports began to approach last year's figures, but earlier in the year, from January to April, exports nearly came to a halt, with volumes barely exceeding 0.1-0.3 thousand t.

The primary markets for Ukrainian ferro alloys include Poland, which imported 9.65 thousand t over seven months, and Turkey, which imported 12.27 thousand t, along with Italy, which imported 6.55 thousand t. Exports to Turkey and Italy saw slight increases, while exports to Poland decreased by 30.2% m-o-m.

Supporting factor:

Resumption of production: The partial reopening of the Zaporizhzhia Ferro alloy Plant (ZFP) in May has contributed to the resumption of shipments, though the plant is only operating at 7% of its total capacity with no significant plans to increase production. The plant is working with leftover raw materials and limited electricity. Other key plants, such as Pokrovsk Mining and Pobuzhsky Ferronickel Plant, remain idle.

Major challenges:

Ukraine's ferro alloy industry faces severe challenges, including high electricity tariffs and energy shortages, both critical for this energy-intensive sector. The Ukrainian government's recent decision to require producers to purchase 80% of their electricity from the EU at European prices has exacerbated these issues, leading to a sharp rise in production costs and threatening the viability of continued production.

This could potentially result in significant declines in both production and exports. In the first seven months of 2024, revenue from ferro alloy exports fell by 81.5% y-o-y to $48.13 million.

Outlook

Serhiy Kudryavtsev, executive director of UkrFA, stated that in 2024, Ukraine's ferro alloy industry's condition will hinge on three factors: shelling, logistics, and access to affordable electricity.