Ukraine’s May steel output down 10% on year as ‘crisis’ continues

Ukraine’s steel output decreased by 10.4% on the year to 1.64 million metric tons in May, down from 1.83 million mt produced in May 2019 due to weak demand and falling prices on world markets amid the coronavirus pandemic, steel making industry association Ukrmetallurgprom said June 25.

“The drop in steel output shows that the crisis in the Ukrainian steel industry continues,” Ukrmetallurgprom said in a statement. “The main reasons for the decline in production of basic metallurgical products, along with the global quarantine, are lower prices and reduced demand for metal products.”

Production of rolled steel dropped by 16.3% on the year to 1.46 million mt and pig iron output fell 0.2% to 1.67 million mt.

Coke output decreased by 12.2% on the year to 805,000 mt in May, down from 917,000 mt produced in May 2019.

Ukraine’s steel industry, which employs 700,000 workers, has asked the government for support to stimulate domestic demand and to make sure that power prices and transportation tariffs remain steady to make sure the sector can weather the crisis.

The association urged the government to cut tariffs for transportation by railroad and seaport handling for the country’s steel sector to stay afloat.

“The steel industry of Ukraine needs a competent state industrial policy to ensure favorable tariffs, provide quality service by state transport monopolies, create conditions for expanding investment in the [manufacturing sector and the related process of increasing metal consumption and protection,” Ukrmetallurgprom said. “Otherwise, the situation could turn into a catastrophe for Ukraine’s economic stability and national security.”

In January through May, Ukraine’s production of steel decreased by 10.5% on the year to 8.295 million mt from 9.27 million mt in January-May 2019, according to Ukrmetallurgprom.

Output of steel pipes and tubes dropped 29.8% on the year to 330,000 mt in January-May, production of pig iron fell 6.5% to 8.158 million mt and rolled steel output fell 6.2% to 7.43 million mt.

Production of coke decreased by 9.1% on the year to 4.02 million mt in the period, down from 4.421 million mt produced in January-May 2019.

As of June 16, out of 21 blast furnaces 18 were in operation in Ukraine, the association said. Also in operation were four out of eight open-hearth furnaces, 14 out of 16 converters, six out of 15 electric furnaces and 15 out of 16 continuous billet casting machines.

In 2019, Ukraine reduced steel output 1.4% on the year to 20.8 million mt, according to Ukrmetallurgprom.

— Alexander Bor