Ukraine: Steelmakers reduce production of rolled products by 16.4% m-o-m

Ukrainian steel companies have reduced production of rolled products in June 2023 by 16.4% m-o-m to 0.393 million tonnes (mnt). However, the same increased by 72% y-o-y.

Pig iron production in June declined by 19.4% m-o-m to 0.486 mnt. Although, the same rose by 49% y-o-y.

Steel production in June fell by 25% m-o-m to 0.437 mnt. While, the same grew by 41% y-o-y.

In January-June 2023, Ukrainian steelmakers produced 2.37 mnt of rolled products, which is a fall of 41% y-o-y. Steel and pig iron production decreased by almost 38% y-o-y to 2.83 mnt and 2.84 mnt, respectively.

Key reasons for low production

1) Logistical problem: Due to the war, there are logistical problems as seaports are blocked. This makes it difficult to transport materials and products.

2) Lower global demand: The global market is not doing so well as many countries are facing threat of recession, which affects the demand for steel.

3) War-related destruction: Two of Ukraine's largest steel companies, Azovstal and Ilyich Iron and Steel Works in Mariupol, were damaged by the conflicts in the region.

Efforts to increase production

The steel companies are working to improve the situation. Since the beginning of the year, they have gradually increased their production. This is possible because the energy supply has become more stable and there is a higher demand for steel in the world market. Some companies, such as Zaporizhstal, have even commissioned new blast furnaces to increase production.

However, setbacks such as the destruction of the Kakhovska hydroelectric power plant and the flattening of the Kakhovka reservoir in June have led to a drop in production. ArcelorMittal Kryvyi Rih, for example, had to suspend steel production and the manufacture of rolled products to save water. Metinvest companies, on the other hand, continue to operate normally.

~GMK Center