Ukraine’s steel output to fall 64% on year to 7.6 mil mt in 2022: GMK

Ukraine may produce 7.6 million mt of steel and 6.9 million mt of steel products in 2022, with 4.7 million mt to be exported, Kyiv-based industry analysts GMK Center said in a report released June 20.

The country’s steel production is likely to fall 64.5% from 21.4 million mt in 2021 due to the war with Russia.

Ukraine produced 4.24 million mt of steel in January-May, with the vast majority of this output coming before the war over January-February. In January-April, the country’s exports of iron ore and iron ore concentrates totaled 13 million mt, while those of ferroalloys stood at 220,000 mt, pig iron at 451,100 mt, and semi-finished steel products at 1.15 million mt, according to GMK.

Mining and steel company Metinvest said earlier that the military conflict, the forced stoppages of Mariupol-based Azovstal and Ilyich Steel and the loss of control over them reduced the presence of Metinvest on the world steel market to 2.5 million mt/year from over 11 million mt/year.

Ukraine’s largest standalone steelworks, ArcelorMittal Kryvyi Rih, which started to gradually resume production in April after a forced shutdown is now operating two coke batteries out of six, one blast furnace out of four, one out of six basic oxygen converters, one out of three continuous casting machines, three casting into ingots machines, and one rolling mill, the company’s spokesperson told S&P Global Commodity Insights.

Its mining department and coke plant are operating at reduced capacity too, but the steelmaker has preserved all jobs and maintained all salary payments.

ArcelorMittal Kryvyi Rih reported in May that it has had to put on hold several investment projects, including a pellet plant initially slated to open in late 2023, due to the Russian invasion.

The company remains on track though to construct a new tail dump, critically needed to continue mining, and to modernize its blast furnace No. 9, which provides two thirds of ArcelorMittal Kryvyi Rih’s total pig iron production. The investments in the two projects are estimated at $420 million.

Pipe production

In May, Ukraine made 45,100 mt of steel pipes, up 150% from April but down 23.5% on the year. Almost 95% of the total was made by pipe group Interpipe, according to Ukraine’s pipe industry association Ukrtruboprom.

Ukrainian pipe and tube production stood at 176,300 mt over January-May, down 27% on the year amid the war.

Interpipe’s spokesperson confirmed the company had recently succeeded in delivering its OCTG premium UPJ-M pipes to Turkey for the first time since the beginning of the war. Their shipping had stopped because traditional supply chains were disrupted by the war. Interpipe is rebuilding some of the chains and forming new ones, but it is difficult to restore pre-war production volumes.

The company is particularly focusing on the European pipe market as it is logistically the closest to Ukraine. It also sells pipe billet but the sales volume is smaller than that of pipe.

— Ekaterina Bouckley