Winter shutdown of ferro alloy factories in Ukraine likely to impact global supplies

The vertically integrated ferro alloy capacity in Ukraine as a whole ceased to function by early November 2023. Both PGOK and MGOK stopped extracting and processing manganese ore in October. The NFP and ZFP production block has likewise ceased from the beginning of November.

Ferro alloy capacity shut down for the following reasons:

• Lack of guarantees of constant energy and water supply in winter
  
  
• The need for repair work
  
  
• Problems with product sales and logistics
  
  

Ferro alloy industries have previously experienced decreased capacity utilisation and production process interruptions. This year's summer saw NFP cut back on output as a result of the need to use less water following the explosion of the Kakhovskaya HPP dam. Additionally, due to disruptions in energy supplies, the industry's firms either partially or totally stopped operating throughout the autumn and winter of 2022-2023.

The Ukrainian ferro alloy industry is represented by quite powerful enterprises:

• Nikopol Ferroalloy Plant (NFP) - with a capacity of 1.2 mnt of products per year.
  
  
• Zaporizhzhia Ferro alloy Plant (ZFP) - up to 400,000 t of products per year.
  
  
• Pokrovsk Mining and Processing Plant (PGOK) - processing up to 9.3 mnt of manganese ore per year.
  
  

Marganets Mining and Processing Plant (MGOK) - processing up to 7 mnt of manganese ore per year.
However, the war led to a significant drop in production in the industry.

In January-September 2023, the output of ferroalloys in Ukraine compared to the same period last year collapsed by 57.5% - to 197.1 thousand tonnes. In pre-war 2021 ferroalloy enterprises of Ukraine increased output by 15% compared to 2020 - up to 858.7 thousand tons.

Source: GMK Center