Ukraine’s exports of pig iron plunged to 55,710 mt in April, down almost 40% from March and by a third on the year as the country withheld more iron for domestic production of steel, Kyiv-based iron and steel consultancy GMK Center said May 13.
Over January-April, pig iron exports were 21.7% lower year on year at 418,000 mt. Exports to the US dominated, with sales to the country generating almost 77% of total revenues.
The US does not buy pig iron from Russia, which delivers to Italy, Turkey and even India.
A tight pig iron market recently has pushed up prices, with leading Platts assessing FOB Black Sea pig iron $7.50/mt higher on the week to $400/mt on May 10. Platts is part of S&P Global Commodity Insights.
The market tightness is in part down to Ukraine struggling to maintain exports, according to sources, with the Ukrainian industry having to cope war-induced bottlenecks. While seaport operations remain irregular, it will be impossible to restore pre-war levels of pig iron production and sales, according to GMK Center’s CEO Stanislav Zinchenko.
However, the slump in Ukraine’s pig iron exports is also directly related to recovery in the country’s steel output and exports, he told Commodity Insights.
Over the first four months of 2024, Ukraine doubled its exports of semi-finished steel and grew exports of rolled steel by 120%, according to Zinchenko.
The blast furnaces that have been brought back online were all operating at full rates, and since there are no plans to restart more furnaces, production of finished steel is prioritized over making more pig iron available for sale, said Zinchenko.
In January-April Ukraine’s crude steel output increased 32.8% on the year to 2.4 million mt.
EU becoming more accessible
Last year the country’s pig iron producers — Metinvest-owned mills and ArcelorMittal Kryvyi Rih — utilized their iron smelting capacities at around 65%-75% and 20%-30%, respectively.
Ukraine exported 1.25 million mt of pig iron in the year, only marginally less than in 2022 but down by 61% or 2 million mt compared with 2021, according to GMK Center.
Although they now mostly rely on the US, Ukrainian pig iron producers raised 13% of their export revenue over January-April from sales to Italy and Poland, and they expect the EU market to become more accessible going forward.
The 12th package of sanctions the EU adopted at the end of 2023 imposes a ban on imports of Russian pig iron. This comes in to effect in 2026, but the quotas that are in place until then already provide for a reduction in supplies from Russia.
This year’s quota for imports of pig iron from Russia amounts to 1.14 million mt, of which 300,000 mt or 26.5% had been used by the end of the first quarter, Commodity Insights data shows.