Domestic cement and concrete producers are able to increase their capacity to meet the needs of recovery in any scenario, according to a survey of cement producers and consumers conducted by CBR last year.
“The study showed that even in a situation of high uncertainty, as it is now, with reduced international financing and extremely limited resources of the Ukrainian budget, cement producers and consumers are ready to quickly restore and expand capacity, ready to invest to meet the recovery demand,” said CBR researcher Tatiana Sytnyk at a meeting of the Confederation of Builders of Ukraine during the presentation of the results.
Cement production has partially recovered since 2023, but consumption is heavily dependent on government funding
According to the CBR study, in 2022, cement production fell significantly due to a decline in domestic consumption – to 5.4 million tons compared to 11 million tons in 2021. However, in 2023-2024, production stabilized, reaching 7.4 million tons and 7.97 million tons respectively. Moreover, according to the interviewed experts, the volume of 8 million tons was the maximum value during the war. After the war is over and the recovery begins, peak cement production can reach a maximum of 12 million tons, but the industry will reach this level in the third or fourth year of recovery.
The main question being discussed by the professional community is whether there will be enough cement to meet the challenges of recovery. It was made more acute by a study conducted in 2022 by the State Foreign Expertise Service, which was based on an optimistic scenario that assumed that there would be enough money for the recovery and that the entire process would take three years, said Pavlo Kachur, chairman of Ukrcement.
“Such calculations assumed a shortage of construction materials, particularly cement. But now the trade union community is assessing the challenges for the industry, taking into account the experience of three years of war and predicting that the recovery will begin primarily with demining, strengthening the demarcation line, and restoring energy facilities. We will start large-scale construction in about the third or fourth year,” he commented to Interfax-Ukraine.
Currently, cement plants are unevenly utilized: facilities in western Ukraine have better utilization, while those in the south and east have worse utilization. In 2022, cement plants operated at a loss, with production not covering fixed costs, but the companies retained their staff. In 2023, they reached break-even operations, as production allowed them to cover fixed costs.
As for cement consumers, the study surveyed producers of concrete, aerated concrete and other building materials representing businesses of various sizes, from small to large businesses, from all regions.
“The study showed that our cement is quite acceptable for producers in terms of quality and even price. It rose in price by 20% in 2023 and by 10% in 2024, in line with inflation,” Kachur said.
Two-thirds of the surveyed cement consumers reported that they increased production in 2023, 20% returned to the pre-war production volume, and there were even those who exceeded it (concrete for infrastructure facilities). However, a year later, in 2024, when the survey was conducted, the mood of cement consumers was rather restrained: they identified the risks of a reduction due to the instability of government funding.
The industry is ready to invest in modernization
According to Kachur, in general, the market experienced a slight decline in cement consumption in 2023, as large-scale protection and restoration projects depend on government funding, and civilian developers are not ready to resume full activity at this stage. Thus, residential and commercial real estate projects have significantly decreased compared to pre-war levels. The expert also called the issue of human resources critical for the industry. New specialists need to be trained to replace mobilized and relocated industry employees.
“This (training, design, and fundraising) will take some time, which will be enough for cement producers to fill the market. First of all, to invest in modernization and expansion. In particular, there are already two ready-made projects for the construction of new kilns to meet the highest modern requirements in Kryvyi Rih and Ivano-Frankivsk and the resource of the Baltsem plant (before the war, it produced about 200 thousand tons of cement with a capacity of 4 million tons),” he said.
The study notes that it is unlikely that completely new plants will be built, but a year is enough to modernize the kiln. It is estimated that at least two plants will launch additional furnaces, which will produce 2 million tons. For example, Kryvyi Rih Cement has already received a special permit to develop the Maryansky limestone deposit (60 km from the plant) and has a plan to build a kiln in the quarry itself to produce clinker. Modernization of the Kramatorsk-based Garmata (nationalized) and Balakliya (Baltsem) plants is also possible.
“Cement companies are ready to make rapid investments in modernization and launch additional kilns when the recovery begins to be the first to respond to the market. The companies are waiting for signals to start the expansion. This could be news about the allocation of funds for recovery and/or demand reaching the level of 9.5 million tons,” explained Sytnyk.
Domestic cement competes on equal terms with European cement
Among the reserves for the critical high demand for recovery, experts also mention the possible return of cement imports to Ukraine. Currently, Ukraine does not import but exports this product.
“We must honestly admit that during the war, exports actually save our industry. Before the war, in 2021, total cement exports amounted to about 56 thousand tons, and in 2024 – 1.7 million tons, which is about 15% of what we produce, which is a large share. We are constantly telling our neighbors: “As soon as Ukrainian consumption picks up, the situation will change dramatically, it will be more profitable for us to transport cement to construction sites in Ukraine, and the issue of imports will become relevant,” Kachur says.
The CBR study states that if reconstruction projects are mainly funded by the EU, there is a high probability of an increase in cement imports from Europe, primarily for infrastructure projects.
The expert recalled the possible risks for the industry at this stage, as there is an overproduction of cement in the world today. Therefore, most developed countries can fully cover all the needs of recovery projects, which can harm domestic producers.
“I want to voice my position publicly: the market (at the recovery stage) of Ukraine should be localized as much as possible with domestic products and available only to countries that supported us during the war. Because we have to apply strict measures to countries that support the aggressor country during the war but want to join the recovery to protect their market,” Kachur emphasized.
According to the forecast of the Food and Agriculture Organization of the United Nations (FAO), the global wheat production in 2025 will amount to 795 mln tonnes, which is the same as in 2024. The organization recorded mixed trends among the largest producing countries.
In the EU, production is expected to increase to 135.5 million tons (+12% yoy) due to the expansion of crops and improved weather conditions. At the same time, the FAO points to the lack of precipitation in the eastern part of the bloc, which may affect the final yield.
In Russia, wheat production is expected to decline due to low soil moisture and reduced acreage. A similar situation is observed in the US, where drought has affected winter wheat crops, which will lead to a decrease in the overall harvest.
According to FAO, wheat production in Ukraine will be below the five-year average. The main reasons are the ongoing armed conflict and dry weather conditions.
In Canada, wheat acreage is expected to increase due to price incentives, but this will be balanced by lower yields. Production will remain at the level of 2024, but will exceed the five-year average.
FAO predicts that India’s harvest will reach a record level of 115.4 million tons. The growth is due to the expansion of acreage, government subsidies and high market prices.
In the Middle East and North Africa, the harvest is expected to decline amid a lack of precipitation. In Argentina, production is expected to increase due to the expansion of crops. In Australia, a moderate decline in harvest volume is forecast, but the figure will remain above 30 million tons.
According to the FAO, the global grain production in 2024 amounted to 2.849 billion tons, which is 0.3% lower year-on-year. The forecast of grain consumption in 2024/25 marketing year is 2.868 billion tons, including 1.534 billion tons of feed grains (+1.1% yoy) and 795.4 million tons of wheat, which is slightly lower than the previous season.
According to national sources, Serbia plans to keep the wheat harvest within 3 mln tons. It is expected that weather conditions will allow to achieve above-average results. The country will continue to export to Italy, Turkey and other countries in the region.
Earlier, the information and analytical center Experts Club released the analysis of the main wheat producers by countries for the period of 1991-2023 – https://youtube.com/shorts/NMwidrCI6iY?si=hE3BXbdvWOG30Nld
The National Bank of Ukraine has revoked the financial services licenses of six non-banking financial institutions and excluded them from the State Register of Financial Institutions.
According to the regulator’s website, this applies to FC BI.Money LLC and Rulla Ukraine LLC, which provided funds and bank metals on credit, Prostozaym LLC, State Enterprise Ukrainian Center Security, State Innovative Financial and Credit Institution – Financial Leasing, PO Lombard Onyx Plus Chernik and Company – provided funds and bank metals on credit in the form of pawn loans.
Another non-banking financial institution changed the scope of the license for the activity of a financial company.
In addition, on the basis of its own application LLC “Financial Company Liberty Finance” agreed to change the scope of the license for the activity of a financial company. Such financial services as factoring, financial leasing, provision of guarantees were excluded from it.
After changing the scope of the license, the company will have the right to carry out activities to provide financial services – the provision of funds and bank metals on credit, the activity of trading in foreign currency values in cash on the basis of the appropriate license for foreign exchange transactions.
The relevant decisions of the Committee on supervision and regulation of non-banking financial services markets adopted on April 3, 2025.
In May, Saudi Arabia will reduce prices for all grades of oil for Asian buyers by $2.3 per barrel – the maximum since October 2022.
As a result, the main grade supplied to Asia – Arab Light – will fall to its lowest price in 4 months. It will cost $1.2 more than the Oman/Dubai oil basket, state-owned Saudi Aramco said in a statement. Prices for all oil grades for the U.S. will be reduced by $0.2 per barrel, for buyers from Northwest Europe and the Mediterranean – by $0.5 per barrel.
Representatives of the CDU are concerned about the safety of Germany’s gold reserves in storage at the US Federal Reserve, Bild reports. In particular, the publication cites the opinion of Christian Democratic Union (CDU) MP Marco Vandervitz, who, according to Bild, unsuccessfully tried to inspect the gold reserves in 2012, trying to force the Bundesbank to either take on a more active role as custodian or repatriate them to Germany.
MEP Markus Ferber (CDU) also called for more thorough inspections of German gold stored in the United States.
“Bundesbank officials should personally count the bullion and document their results,” Bild quoted him as saying.
Germany has the second largest gold reserves in the world, and keeps 37% of them – about 1,236 metric tons worth 113 billion euros – in the vaults of the Federal Reserve System of New York. These reserves of the precious metal ensure that the Bundesbank will have access to what it can exchange for US dollars (or any other hard currency) if needed.
German politicians are concerned about both Trump’s tariff policy and his attempts to expand his powers and become above the US judicial system.
In February, Bundesbank President Joachim Nagel told Bild: “We have (…) no doubt that in the New York Fed we have a reliable partner for the storage of our foreign exchange reserves.”
The publication points out that concerns about the fate of gold have been exacerbated by “none other than billionaire and senior Trump administration official Elon Musk, who called for a review of the US’s own foreign exchange reserves.”
Ferrexpo plc, a mining company with major assets in Ukraine, produced 1 million 347.749 thousand tons of pellets in January-March this year, down 26% year-on-year (1 million 813.973 thousand tons).
According to the company’s press release on Monday, the total production of marketable products (pellets and iron ore concentrate) in 1Q2025 increased by 3% compared to 1Q2024 to 2 million 125.467 thousand tons. In particular, the production of iron ore concentrate amounted to 777,718 thousand tons compared to 240,516 thousand tons in 1Q2024. The company also produced 81,879 thousand tons of DR pellets (not produced in Q1-2014), 1 million 105,049 thousand tons of premium pellets (down 36%) and 160,913 thousand tons of other pellets (up 95%).
The press release notes that during the quarter, the group operated two pelletizing lines (out of four) in addition to producing commercial concentrate, however, due to the recently announced suspension of VAT refunds, operations were reduced to one line.
Commenting on the group’s performance, Lucio Genovese, interim CEO, stated that in the first quarter of 2025, total commercial production was the highest quarterly figure since the start of the full-scale invasion in February 2022. This is due to increased production of high-grade concentrates sold to customers in Asia, combined with stable production of premium products. We
“The increase in production, however, did not translate into improved earnings due to persistently high production costs, in particular imported electricity, and deteriorating premiums and prices for iron ore pellets. The environment in which we operate is becoming increasingly challenging. In March, the Ukrainian tax authorities announced their decision to suspend VAT refunds for January 2025 to our two main operating subsidiaries, PGOK and Yenakiieve Iron Ore Enrichment, in the total amount of UAH 512.9 million (approximately $12.5 million). This suspension of VAT refunds, which is significant, resulted in a decrease in available liquidity to finance operations. This has forced us to immediately reduce our operations to one pellet production line and implement significant cost-cutting measures across the business, impacting labor, mining and processing, repair and maintenance, capital expenditures, and humanitarian and social funding,” Genovese emphasized.
According to him, this will have a broader impact on the economic and social fabric of the 50,000-strong city of Horishni Plavni, where the company is the main employer, and the Poltava region and the 3,000 small and local businesses that depend on Ferrexpo. It will also have an impact on the national economy through reduced taxes and fees, payments to suppliers, including energy suppliers, UZ and ports.
“We continue to appeal to the Ukrainian government and other stakeholders to restore VAT refunds so that we can maintain our business at higher operating levels, support our workforce and the integrity of our operations,” the top manager emphasized.
As reported earlier, Ferrexpo increased pellet production by 58% in 2024 compared to 2023, up to 6 million 70.541 thousand tons from 3 million 845.325 thousand tons. In the fourth quarter of 2024, the company produced 1 million 503.373 thousand tons of pellets, up 18% quarter-on-quarter (1 million 269.727 thousand tons).
At the same time, the total production of marketable products (pellets and iron ore concentrate) in 2024 increased by 66% compared to 2023, to 6 million 889.879 thousand tons from 4 million 152.028 thousand tons. In particular, the production of salable concentrate amounted to 819,338 thousand tons compared to 306,703 thousand tons in 2023. The company also produced 489,720 thousand tons of DR pellets, 4 million 984,990 thousand tons of premium pellets and 595,831 thousand tons of other pellets.
In 2023, Ferrexpo produced 3.845 million tons of pellets, which is 36.5% less than in 2022.
Ferrexpo owns a 100% stake in Yeristovo Mining, 99.9% in Bilanivsky GOK and 100% in Poltava Mining.
