Business news from Ukraine

Business news from Ukraine

Ukraine has increased exports of scrap metal 3.5 times

Ukrainian enterprises in January-July this year increased exports of ferrous scrap metal 3.5 times compared to the same period last year – up to 101.615 thousand tons.

According to statistics released by the State Customs Service (SCS) on Monday, in monetary terms, scrap metal exports for the period amounted to $29.807 million (an increase of 2.4 times).

At the same time, the growth of scrap metal exports was recorded since March: if in January about 8.28 thousand tons of scrap metal was exported, in February – 16.5 thousand tons, in March – 15.45 thousand tons, in April – about 16.19 thousand tons, in May – 21.003 thousand tons, in June – 14.6 thousand tons, but in July it decreased to 9.567 thousand tons.

Scrap metal exports in January-July-2023 were to Poland (87.70%), Greece (5.80%) and Bulgaria (3.65%).

In the first two months of the year the country did not import scrap metal, in March-July imported 573 tons of scrap for $222 thousand (45.05% from Slovakia, 21.62% from Poland, 12.61% from Estonia).

Earlier, the president of Ukrmetallurgprom, Oleksandr Kalenkov, stated in his column on the Interfax-Ukraine website that scrap metal is exported through the European Union, where there is a preferential export duty of EUR3 per ton, and from there the raw material is redirected to real customers. To export the raw materials to the clients at once would cost EUR180 export duties – and the Ukrainian budget has already lost UAH 350 mln on this.

According to him, the State Bureau of Investigation is already interested in such export schemes.

The head of Ukrmetallurgprom called for a temporary ban on the export of ferrous scrap to provide metal companies with strategically important raw materials amid the ongoing war.

“If scrap metal remains in the country – more than 500 thousand people will have jobs, and the country will have millions of foreign exchange earnings from steel exports. At the same time, the military will also benefit, because metallurgists help the fighters a lot, buying equipment and cars for them, and even producing body armor. No one will benefit from the export of scrap metal. Therefore, the authorities should act proactively and temporarily ban exports until the situation stabilizes and ceases to threaten national economic security,” said Kalenkov.

He specified that a ton of scrap metal processed into steel gives 10 times more to the budget than the export duty to the EU – about $300 per ton.

As reported, Ukraine in 2022 reduced exports of ferrous scrap in 11.5 times compared to the previous year – to 53.557 thousand tons, in money terms decreased by 12.4 times – to $19.271 million. At the same time, last year the country reduced imports of scrap metal in physical terms in 12.6 times – to 1.824 thousand. Imports of scrap metal in 2022 were mainly from Turkey (78.92% of supplies in monetary terms), Russia (13.25%) and Cyprus (5.08%); exports – to Turkey (38.97%), Poland (34.25%) and Greece (10.12%).

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Ukraine increases pig iron exports by 16.6%

Ukraine in January-July of this year increased exports of pig iron in physical terms by 16.6% compared to the same period last year – up to 906.423 thousand tons.

According to statistics released by the State Customs Service (SCS), for the period exports of pig iron in monetary terms amounted to $346.880 million (down 18.1%).

At the same time, exports were mainly to Poland (63.56% of shipments in monetary terms), Spain (19.87%) and the Czech Republic (7.24%).

For seven months of 2023 Ukraine imported 37 tons of pig iron for $52 thousand from Germany (61.54%) and Brazil (38.46%), with no imports in June and July.

As reported, Ukraine in 2022 reduced exports of pig iron in physical terms by 59% year-on-year to 1 million 325.275 thousand tons, in monetary terms by 61.1% to $638.774 million.

In 2022, Ukraine imported 40 tons of pig iron worth $23 thousand, while in 2021 – 185 tons of pig iron worth $226 thousand.

Exports were mainly to the USA (38.47% of shipments in monetary terms), Poland (32.91%) and Turkey (8.12%), imports – from Germany (100%).

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Ukraine has reduced exports of steel semi-finished products by 76%

Ukraine in January-July this year reduced exports of semi-finished carbon steel products in physical terms by 76.4% compared to the same period last year – to 658.729 thousand tons.

According to statistics released by the State Customs Service (SCS), in monetary terms, exports of semi-finished carbon steel products for this period amounted to $354.178 million (down 62.9%).

The main exports were to Bulgaria (33.71% of shipments in monetary terms), Poland (31.62%) and Turkey (7.45%).

In January-July Ukraine imported from China 92 tons of semi-finished products worth $169 thousand.

As reported, in 2022 Ukraine in physical terms reduced exports of semi-finished carbon steel products by 72% in comparison with the previous year – to 1 million 899.729 thousand tons, in monetary terms by 70.9% – to $1 billion 191.279 million. The main exports were to Bulgaria (26.55% of supplies in monetary terms), Poland (13.97%) and Italy (12.13%).

In addition, Ukraine imported 5.558 thousand tons of similar products in 2022, which is 85.7% less than in 2021. In monetary terms, imports decreased by 86% to $3.634 mln. Imports were made from Russia (96.92% of supplies – before the war), China (1.84%) and Romania (1.21%).

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Head of Office of President of Ukraine hopes that Ukraine’s neighbors will abandon blockade of Ukrainian agricultural exports

In a conversation with the Secretary of State of the Presidential Chancellery, Andriy Yermak expressed hope that Ukraine’s neighbors would abandon the blockade of Ukrainian agricultural exports after September 15.

“The interlocutors discussed in detail the issue of ensuring the export of Ukrainian grain by land to the EU countries in the context of the continued blockade of Ukrainian ports. The head of the Presidential Office expressed hope that Ukraine’s neighboring countries would refrain from imposing unilateral restrictive measures on the export of Ukrainian agricultural products after September 15,” the press service of the Presidential Office said in a statement on Sunday following the meeting in Jeddah.

“During a meeting with the State Secretary of the Office of the President of the Republic of Poland, Head of the Bureau of International Policy Marcin Przydach, the head of the office expressed gratitude to Polish partners for their comprehensive assistance and solidarity with Ukraine in countering the armed aggression of the Russian Federation,” the statement also said.

The press service also reports that “Yermak praised Poland’s readiness to join the implementation of the Ukrainian peace formula.”

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Exports of agro-products decreased by 29% – UCAB

Ukraine’s agrarian sector exports in July 2023 decreased by 29% year-on-year to 3.7 million tons due to the inability of transport to cross the border due to queues, the Ukrainian Club of Agrarian Business (UCAB) reported.

“The disappointing export results are primarily due to the stoppage of the “grain corridor” on July 18, as well as its low activity even before the termination. In July 2023, only 292 thousand tons (of agro-products – IF-U) were exported through this channel. Also, Russia’s shelling of the infrastructure of the Danube river ports had a negative impact on export volumes,” the report says.

In the structure of agricultural exports in July compared to June, UCAB analysts noted a 40% reduction in the export of grain crops (2.3 million tons), where corn accounted for 51% of supplies, wheat – 36%, barley – 13%.

A 12% drop in the index was also shown by cakes extracted in the production of vegetable oils: 320.7 thousand tons of them were exported in July. The share of sunflower cake accounted for 91%, soybean cake – 9%.

At the same time, analysts noted a 37% increase in exports of oilseeds – up to 330 thousand tons. Rapeseed accounted for 73%, soybeans – 23%, sunflower seeds – 3%.

According to UCAB data, the export of vegetable oils also showed positive dynamics – 549.4 thousand tons, which is 7% higher than in June. The share of sunflower oil amounted to 92%, rapeseed and soybean oil – 4% each.

“The biggest drop in export volumes was demonstrated by the positions having significant weight at their relatively low value. They were mainly exported within the framework of the Black Sea Grain Initiative. These are grain crops and oilcakes,” the business association emphasized.

Analysts explained the growth of oilseeds export volume by the beginning of harvest and the start of its export from the country.

“The lack of export opportunities through seaports, the destruction of the infrastructure of seaports of the Odessa region and river ports of the Danube, the risk of a continued ban on imports of a number of Ukrainian agro-industrial products in neighboring EU countries will have a very negative impact on our future exports. We will be able to export products not when the world needs them, but when we have the opportunity to do so, and with significantly higher logistics costs,” the UCAB summarized, while emphasizing that resumption of free navigation is necessary both for Ukraine and the world.

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“Kernel” increased oil sales by 5 times and grain exports by 6 times

Kernel Agroholding, one of the largest in Ukraine, processed 650.4 thousand tons of sunflower seeds in the fourth quarter of fiscal year 2023 (April-June), a 4-fold increase compared to the same period last FY.

According to the company’s report, processing was down 13% quarter-on-quarter, reflecting the usual sunflower seed shortage near the end of the season, which forced three of the group’s six operating plants to temporarily stop processing oilseeds in May-June.

“Two processing plants owned by the Group remain inaccessible in the high-risk area of the Kharkiv region with regular shelling by Russian occupiers,” the report states.

Overall, in 2023 FG processing grew by 15% to 2.51 million tons.

According to the report, vegetable oil sales in April-June 2023 increased by 14% quarter-on-quarter to 312,700 tons, including 21,000 tons of bottled sunflower oil, and the growth was fivefold compared to the fourth quarter of last year.

“The group continues to prioritize vegetable oil and meal exports over grain exports, given the more attractive margins in the oilseed processing value chain compared to grain export operations,” it said.

For the entire 2023 FY, sales reached 1 million 132.7 thousand tons, exceeding the previous FY by 17%.

It is pointed out that Kernel’s silo loadings in the fourth quarter of FY 2023 were seasonally insignificant at 98,000 tons, 50% higher than the fourth quarter of last year. As a result, total intake during FY 2023 was 2.83 million tons, down 32% from FY 2022.

According to the report, the transshipment volume of export terminals in Ukraine in April-June 2023 decreased by 13% quarter-on-quarter to 933.1 thousand tons, while there was no transshipment in the same period last year.

Overall for FY 2023, Kernel terminals transshipped 4 million 437.7 thousand tons of goods, 39% less than a year earlier, which the company attributed to failures in the grain deal.

“Russia terminated the grain deal on July 18, 2023. Thus, the Group’s future ability to export goods through Ukrainian Black Sea ports is unclear,” the report states.

“Kernel” recalled that on July 19, its assets in the port of “Chernomorsk” were subjected to a massive missile attack from Russia. As a result, grain transshipment facilities and grain stored in the port were significantly damaged. According to initial estimates, it will take considerable time to return the assets to operation.

According to the report, the group’s grain exports from Ukraine in the fourth quarter of FY 2023 amounted to 755,000 tons, down 8% from the previous quarter but 6 times higher than in the fourth quarter of FY 2022.

On a year-on-year basis, Kernel’s grain export volumes more than halved year-on-year to 3 million 833.2 thousand tons, the document specifies.

“Kernel” before the war ranked first in the world in the production of sunflower oil (about 7% of world production) and its export (about 12%), and was the largest producer and seller of bottled sunflower oil in Ukraine. In addition, the company was engaged in the cultivation of other agro-products and their sales.

Kernel’s net profit for the first nine months of 2023FY increased by 36% to $437 mln, while revenues fell by 45% to $2.715 bln.

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