Business news from Ukraine

National bank of Ukraine’s official rates as of 11/08/22

National bank of Ukraine’s official rates as of 11/08/22

Source: National Bank of Ukraine

Cost of Ukrainian timber almost halved due to war and changes in external situation – head of Forest Agency

Due to the war and changes in the external situation, the cost of Ukrainian timber has almost halved, warehouses are full, the processor dictates conditions on the stock exchanges, head of the State Forestry Agency of Ukraine Yuriy Bolohovets described this new situation on the market in a column in NV Business.
“Taking into account the depreciation of the hryvnia against the dollar, the cost is almost halved. Instead of a seller’s market, we are seeing the formation of a buyer’s market. The share of reductions is growing on the exchanges: the processor is already dictating the terms,” he wrote.
Bolohovets clarified that out of the volume of unprocessed wood put up for auction, on average, 60% can be sold on the first attempt, and 50% – processed – 50%.
In his opinion, the reasons for this transformation of the market are the end of the era of “covid” repairs in the United States and other countries, the rise in the price of mortgages and the reduction in construction, the decrease in demand for building materials, in particular, Europeans do not invest in housing due to a jump in lending rates and the risk of war.
“In China, a crisis is brewing in the field of housing construction. Against this background, the Celestial Empire is flooded with a stream of cheap timber from Russia, which is ready to give up its own resources at a big discount. The situation is no better for us in other Asian markets,” the head of the State Forest Agency explained.
He added that the Turkish market, in addition to the Russian one, is also “overwhelmed” with Belarusian products, which then, bypassing the sanctions, enter the European market.
The head of the State Forestry Agency stressed that the main factor in the negative trends in Ukraine is the war and the blocking of ports, without which the country cannot export raw materials to Asia.
“The alternative export route through Gdansk is frankly unprofitable, logistics eats up all income,” Bolokhovets stated.
At the same time, according to him, as a result of the program of anti-crisis measures, forestry enterprises in June reached the volume of harvesting at the level of 90-92% of the previous year. In particular, enterprises in the Chernihiv and Sumy regions, the northern part of the Kiev region have resumed full-fledged work, logistics are being established to raise sales prices in problem regions.
The head of the State Forestry Agency specified that according to the results of the first half of the year, harvesting decreased by 20% (the largest drop in Kyiv, as well as Chernihiv, Sumy, Kharkiv regions, where shelling or hostilities continue). However, due to the transition to auctions for all types of products, revenue increased by UAH 1.45 billion compared to the first half of 2021: 4.4 million cubic meters of raw wood were sold. m in the amount of UAH 8.5 billion, which allowed to increase taxes by UAH 1.2 billion and net profit from UAH 215 million to UAH 350 million.
Speaking about the steps being taken to contain the situation, Bolohovets announced a shift in emphasis to logging, which is in great demand, and primarily to hardwoods: if an almost stable increase in value is recorded for oak during trading on the stock exchange, sometimes by 30-60%, then pine and spruce are bought at a price close to the starting one.
According to him, production will be reoriented to more popular types of products, such as blanks for euro pallets.
He added that sales of firewood are on the rise, as there is a “crazy” demand for firewood, pellets and other raw materials for heating in Europe amid declining interest in construction timber.
The head of the State Forest Agency also called for a more active fight against sanctioned wood from Russia and Belarus on the European market, for revitalizing the domestic market by restoring damaged housing and building temporary timber, which can then be reused.

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Beer production in Ukraine for 7 months decreased by almost a third

The production of beer in Ukraine (except for non-alcoholic beer with an alcohol content of up to 0.5% by volume) in January-July 2022 decreased by 31.6% compared to January-July 2021, to 71.4 million decalitres.
As reported on the website of the industry organization of brewers “Ukrpivo”, for seven months of 2022, a recovery in beer production is recorded after a fall in the first quarter, when this figure decreased by 50% compared to January-March – from 34.1 million decalitres to 17.1 million gave.
Subsequently, beer production in the country was recovering – in the first four months of this year, the decline was 42.8% compared to the same period last year, in May – 36.4%, June – 32%, July – 31.6%.
According to Ukrpiva, malt production in January-July 2022 decreased by 31.3% compared to January-July 2021, to 93.7 thousand tons. Thus, the recovery of its production is recorded after a fall in the first quarter of 2022 by 40.8%, and a sharp reduction in June, by 50.6%.
As reported, in 2021 Ukraine produced 5% less beer compared to 2020 – 170.5 million decalitres, and in 2020 its production decreased by 0.4% compared to 2019 – to 179.7 million decalitres.
Malt production in 2021 amounted to 218.5 thousand tons, which is 19.5% less than in 2020. At the same time, the year before last, its production decreased by 18% compared to 2019, to 275 thousand tons.

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Metinvest cuts steel production by 45%

According to the results of January-June this year, Metinvest reduced steel production by 45% compared to the same period last year, to 2.412 million tonnes, according to a press release from the parent company Metinvest B.V. on Wednesday.
According to the report, the production of pig iron decreased 49%, to 2.252 million tonnes, coke fell by 55%, to 1.075 million tonnes.
At the same time, in connection with the start of a large-scale military aggression of the Russian Federation against Ukraine, from February 24, 2022, Metinvest decided to halt the manufacturing activities of its assets in Mariupol, Avdiyivka and Zaporizhia. The group’s Zaporizhia enterprises resumed their production operations later.
The group’s facilities in Mariupol and Avdiyivka have been affected by hostilities.
In the second quarter, iron and steel production amounted to 424,000 tonnes and 450,000 tonnes, respectively, which is 77% lower than in the previous quarter. In general, in the first half of 2022, the production of iron and steel amounted to 2.252 million tonnes and 2.412 million tonnes, respectively, which is 49% and 45% lower than the same period last year. The lack of production from the Mariupol steelmakers since the end of February 2022 was partly compensated by production volumes at Kamet Steel.
In addition, in the second quarter of 2022, the production of merchant semi-finished products decreased by 52% compared to the previous quarter, to 249,000 tonnes, largely due to a slump in hot metal production. In the first half of 2022, the production of merchant semi-finished products decreased by 47%, to 771,000 tonnes. This was partly compensated by the output of merchant billets at Kamet Steel, the effect of which in H1 2022 was 444,000 tonnes.
In the second quarter of 2022, the production of finished products decreased by 72% compared to the previous quarter, to 414,000 tonnes. At the same time, the production of flat products decreased by 946,000 tonnes, to 167,000 tonnes, because of the lack of production from the Mariupol steelmakers since late February 2022 and the shutdown of the Italian re-rolling plants for a scheduled maintenance in May 2022 in the absence of stable slab supplies. Production of long products decreased by 81,000 tonnes to 247,000 tonnes because of a production decline at Kamet Steel, irregular deliveries of billets from Kamet Steel to Promet Steel in Q2 2022, and the lack of production at Azovstal since the end of February 2022.
In the first half of 2022, the production of finished products decreased 46% compared to the same period last year, to 1.884 million tonnes. At the same time, the production of flat products decreased 1.658 million tonnes, to 1.281 million tonnes, the production of long products increased by 125,000 tonnes, to 575,000 tonnes following the acquisition of re-rolling facilities by Kamet Steel, which fully compensated the lack of Azovstal’s volumes since the end of February 2022 and the lower output at Promet Steel given the aforementioned reasons.
The production of rail products fell by 2,000 tonnes to 10,000 tonnes, pipe products – by 62,000 tonnes to 18,000 tonnes.
The output of the group’s coke-making assets has been affected by the war in Ukraine. Thus, in the second quarter of 2022, coke production decreased 63% compared to the previous quarter, to 292,000 tonnes, and in the first half of 2022 it fell by 55% compared to the same period last year, to 1.075 million tonnes.

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Law, philology and IT are traditionally the most demanded specialties among applicants in Ukraine

Law, philology and IT specialties are traditionally in the highest demand among applicants to Ukrainian universities, Minister of Education and Science of Ukraine Serhiy Shkarlet said.
“In 2020-2022, in the structure of the state order, much attention is paid to engineering high-tech specialties, that is, professions of the future. But traditionally, the most active specialties in terms of demand are law, philology and IT specialties,” Shkarlet said on the air of the national telethon on Thursday afternoon .
At the same time, the minister noted that today there is also a significant demand for the specialty “psychology” (11,000 applications have already been submitted) and “pedagogy” (9,000 applications).

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Import of goods to Ukraine in % to the previous period in 2021 and 2022

Import of goods to Ukraine in % to the previous period in 2021 and 2022

SSC of Ukraine

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