In January-April this year, Ukrainian enterprises reduced consumption of rolled metal products by 13.89% year-on-year to 1 million 6.6 thousand tons.
According to a press release from Ukrmetallurgprom, 351.6 thousand tons, or 34.93% of the domestic rolled metal consumption market, were imported during this period.
According to Ukrmetallurgprom, in January-April 2024, steel companies produced 1.973 million tonnes of rolled metal products (130.5% compared to the same period in 2023), of which, according to the State Customs Service of Ukraine, about 1.318 million tonnes, or 66.8%, were exported. In January-April 2023, the share of exports amounted to 42.9% (634 thousand tons with a total production of 1.512 million tons of rolled steel).
The share of semi-finished products in export deliveries in January-April 2024 was 45.45%, which is significantly lower than in January-April 2023 (49.37%). The share of flat products in export deliveries in the first four months of 2024 is significantly higher than in January-April 2023 (40.36% and 28.86%, respectively). The share of long products is significantly lower than in January-April 2023 (14.19% in 2024 vs. 21.77% in 2023).
“In the first four months of 2024, the domestic market capacity amounted to 1 million 6.6 thousand tons of rolled steel, of which 351.6 thousand tons, or 34.93%, were imported. In January-April 2023, the domestic market capacity amounted to 1.169 million tons, of which 291 thousand tons, or 24.89%, were imported. Thus, in the first four months of 2024, there was a decrease in the domestic market capacity by 13.89% compared to the first four months of 2023, with a simultaneous increase in the share of the import component by 10.04%,” the press release states.
The structure of imports for the first four months of 2024 is still characterized by a significant dominance of flat products over long products (82.88% and 15.27%, respectively); in January-April 2023, the dominance of flat products over long products was also significant (79.86% and 18.97%, respectively).
According to the State Customs Service, the main export markets for Ukrainian rolled steel products in January-April were the European Union (81.6%), the rest of Europe (5.6%) and South America (4.5%).
Other European countries ranked first among metallurgical importers in the period under review (44.5%), followed by the EU-27 (37.9%) and Asia (16.7%).
As reported, Ukraine’s rolled metal market grew 2.19 times in 2023 compared to 2022, to 3 million 505.6 thousand tons. The company imported 1 million 118.6 thousand tons, or 31.91% of the domestic rolled steel consumption market.
In 2023, Ukrainian steelmakers produced 5.37 million tons of rolled metal products (100.4% compared to 2022), of which, according to the UAVtormet Expert and Scientific Council, about 2.99 million tons, or 55.6%, were exported.
In 2022, the share of exports amounted to 81.7% (4.37 million tons with a total production of 5.35 million tons of rolled metal products).
The share of semi-finished products in export deliveries in 2023 was 40.30%, which is significantly lower than in the same period in 2022 (43.45%). The share of flat products in exports for the year is also significantly higher than a year earlier (40.41% and 36.34%, respectively). At the same time, the share of long products is comparable to the figure for the previous similar reporting period (19.53% in 2023 vs. 20.21% in 2022).
In 2023, the domestic market capacity amounted to 3,505.6 thousand tons of rolled steel, of which 1,118.6 thousand tons, or 31.91%, were imported. In 2022, the domestic market capacity amounted to 1598.6 thousand tons, of which 621.6 thousand tons, or 38.88%, were imported. Thus, in 2023, there was an increase in the domestic market capacity by 119.29% compared to 2022, while the share of the import component decreased by 6.98%.
The structure of imports last year was still characterized by a significant dominance of flat products over long products (76.08% and 23.87%, respectively); in 2022, the dominance of flat products over long products was also significant (68.69% and 30.41%, respectively).
According to UAVtormet, the main export markets for Ukrainian steel products in 2023 were the EU (82%) and the rest of Europe (7.5%).
Among metallurgical importers in 2023, the first place was occupied by other European countries (42.4%), the second by the EU-27 (37.3%), and the third by Asian countries (18.2%).
In January-April this year, Ukraine increased imports of coke and semi-coke in physical terms by 4.86 times compared to the same period last year, up to 156.255 thousand tons.
According to statistics released by the State Customs Service (SCS) on Friday, coke imports in monetary terms increased 3.5 times to $56.096 million during this period.
In the first four months of the year, the country exported 46 tons of coke worth $16 thousand to Moldova (93.75%) and Latvia (6.25%) (in January and March 2014, there were no exports, in 4 months of 2013, 32.168 thousand tons of coke and semi-coke were exported for $16.095 million).
Imports were carried out mainly from Poland (89.84% of supplies in monetary terms), China (5.72%) and the Czech Republic (3.49%).
As reported, in 2023, Ukraine reduced imports of coke and semi-coke in physical terms by 8.5% compared to 2022 – to 328.697 thousand tons, while imports in monetary terms decreased by 25.8% to $129.472 million.
In 2023, Ukraine exported 3,383 thousand tons of coke, down 12.3% compared to 2022. In monetary terms, it decreased by 22.2% to $787 thousand.
Exports were carried out to Moldova (100% of supplies in monetary terms), while imports were mainly from Poland (88.47%), Colombia (7.72%) and the Czech Republic (3.15%).
In 2022, Ukraine decreased exports of coke and semi-coke in physical terms by 98% compared to the previous year to 3,856 thousand tons, and in monetary terms by 97.6% to $1,011 million. The main exports were made to Hungary (42.63% of supplies in monetary terms), Georgia (37.69%) and Turkey (17.41%).
In 2022, Ukraine imported 359.192 thousand tons of coke and semi-coke, which is 54.5% less than in 2021. In monetary terms, imports decreased by 50.3% to $174.499 million. Imports were carried out mainly from the Russian Federation (43.43% of supplies in monetary terms, before the war), Poland (30.07%) and the Czech Republic (13.15%).
As a result of the war, a number of mines and coke plants are located in the territories temporarily not controlled by Ukraine.
The National Bank of Ukraine (NBU), taking into account Russia’s recent terrorist attacks on energy infrastructure, has included in its macroeconomic forecast an average electricity deficit of about 5% in 2024-2025, while estimating electricity imports at $0.8 billion in 2024 and $0.6 billion in 2025.
“If there are no new significant destructions, the NBU estimates that the electricity deficit, even taking into account imports and partial restoration/installation of new generating capacities, will be 5-7% on average in the second to fourth quarters of 2024,” the NBU said in its April inflation report, which was recently released.
This means restrictions on consumption for both households and industry. Due to uneven consumption throughout the day during peak hours, the deficit may reach 25-30% and be higher in energy-deficient regions, the National Bank explained.
“The deficit will persist in 2025 (an average of 7% in the first quarter and 3% by the end of the year),” its experts believe.
According to the report, a significant electricity deficit is likely to occur in the second quarter of 2024 due to a decrease in floods and the need to repair nuclear power units. In the future, the electricity deficit may increase with increased consumption in the summer and during the heating season.
The NBU reminded that the integration of Ukraine’s power system with the European one allows for the import of 1.7 GW of capacity (as authorized by ENTSO-E), which is used to compensate for temporary shortages of generating capacity during peak consumption hours and to balance the power system. However, due to significant fluctuations in consumption, in particular in neighboring countries, the import capacity is likely to be less than the maximum volume. In addition, import coverage is limited due to imbalances in the grid, including low transmission capacity in some regions due to significant damage.
It is pointed out that the risk of increased Russian attacks on energy infrastructure remains high for both production and distribution capacities. In the event of further damage, GDP growth will be lower than in the baseline scenario (3% in 2024 and 5.3% in 2025), and price increases will be higher due to higher costs resulting from the use of more expensive energy sources.
“However, the level of readiness of businesses and households for potential electricity outages is higher than in 2022-2023, which will limit the negative impact of the electricity shortage on the economy,” the NBU said.
The plants of nitrogen holding Ostchem produced 520.6 thousand tons of mineral fertilizers in the first quarter of 2024, which is only 1% more than in the first quarter of 2023 (515.5 thousand tons), the holding said in a statement on Wednesday.
“The growth in production of the Ukrainian chemical industry has stopped due to the uncontrolled growth in fertilizer imports from Poland, as well as Russia-friendly Azerbaijan and Turkmenistan,” the company said.
According to the company, in the first quarter of 2024, fertilizer imports increased by 35% to 701.2 thousand tons.
It is specified that Cherkasy Azot produced 404.3 thousand tons in January-March this year, while Rivne Azot produced 128 thousand tons of fertilizers.
According to the report, the production structure remains fairly stable: ammonium nitrate is the leader (246 thousand tons produced), followed by urea-ammonium nitrate (UAN) (123.8 thousand tons) and urea (123.5 thousand tons). Production of limestone-ammonium nitrate (LAM) increased slightly year-on-year to 15.8 thousand tons, and ammonia to 9.08 thousand tons.
Ostchem noted that it met its obligations in full during the spring sowing season, but in 2024 the negative industry trend intensified, with fertilizer imports significantly exceeding domestic production.
“In the first quarter of 2024, imports amounted to 701.2 thsd tonnes, exceeding domestic production by 35%. Imports continue to kill domestic production: four fertilizer producers have already been shut down – OPP, Dniproazot, Rivneazot and Sumykhimprom,” commented Oleg Arestarkhov, Head of Corporate Communications at Group DF.
It is noted that Ukrainian producers continue to lose ground in the Ukrainian market in most fertilizer segments, except for UAN.
“First of all, Ukrainian chemical plants are dramatically losing the urea market: in the first quarter, Ukraine produced 123.5 thousand tons of urea, while imports amounted to 181 thousand tons. 88% of all imported urea came from Azerbaijan and Turkmenistan, countries friendly to Russia,” Arestarkhov added.
According to him, Poland is also strengthening its position as the largest importer of fertilizers to Ukraine, as it is currently flooded with cheap Russian and Belarusian fertilizers that are not subject to EU sanctions, which is why all the excess fertilizers from the Polish market are being redirected to Ukraine.
According to Ostchem, in 2023, Poland imported 1.016 million tons of urea, of which urea from Russia accounted for 34% (345 thousand tons). At the same time, in the first quarter of 2024, Poland has already become the undisputed leader among importers of such fertilizers as ammonium nitrate (52 thousand tons out of 109.7 thousand tons of total imports), ammonium sulfate nitrate (7.9 thousand tons out of 9.4 thousand tons), UAN (17.4 thousand tons), and NPK (63.2 thousand tons out of 144.3 thousand tons) in the Ukrainian market.
In the first quarter, Ukraine imported 121.9 thousand tons of sulphate (China is the leader with 75.3 thousand tons) and 74.6 thousand tons of superphosphate (Bulgaria – 37.3 thousand tons and Greece – 27.4 thousand tons),
“Unfortunately, behind the loud slogans of Ukrainian government officials within the Buy Ukrainian campaign, there are no practical steps to reduce imports and protect the Ukrainian fertilizer producer,” Arestarkhov emphasized, recalling the specific proposals of the Ukrainian Chemists Union to protect the domestic market that were submitted to the government.
Ostchem is the nitrogen holding of Dmitry Firtash’s Group DF, which unites the largest mineral fertilizer producers in Ukraine. Since 2011, it has included Rivne Azot and Cherkasy Azot, as well as Severodonetsk Azot and Stirol, which are out of operation and located in the occupied territories.
Cherkasy Azot PrJSC (Cherkasy, Ukraine) is one of the largest Ukrainian chemical companies. Its design production capacity is 962.7 thousand tons per year of ammonia, 970 thousand tons per year of ammonium nitrate, 891.6 thousand tons of urea, and 1 million tons per year of UAN.
Rivne Azot is one of the largest Ukrainian chemical companies in Western Ukraine. On April 12, 2024, Group DF and South Korean Hyundai Engineering signed an agreement to build a chemical hub in Rivne. The project envisages the construction of green ammonia and hydrogen plants based on renewable energy sources; new enterprises and production sites for nitrogen fertilizers and chemical derivatives.
In January-March this year, Ukraine increased imports of coke and semi-coke in physical terms by 9.1 times compared to the same period last year, up to 111.600 thousand tons.
According to the statistics released by the State Customs Service (SCS), coke imports in monetary terms increased 7.1 times to $42.718 million over the period.
In the first three months of the year, the country exported 5 tons of coke for $1 thousand to Latvia (there were no exports in January and March, as well as in January-March 2023).
Imports were carried out mainly from Poland (95.34% of supplies in monetary terms), the Czech Republic (3.42%) and Hungary (1.23%).
As reported, in 2023, Ukraine reduced imports of coke and semi-coke in physical terms by 8.5% compared to 2022 – to 328.697 thousand tons, while imports in monetary terms decreased by 25.8% to $129.472 million.
In 2023, Ukraine exported 3,383 thousand tons of coke, down 12.3% compared to 2022. In monetary terms, it decreased by 22.2% to $787 thousand.
Exports were carried out to Moldova (100% of supplies in monetary terms), while imports were mainly from Poland (88.47%), Colombia (7.72%) and the Czech Republic (3.15%).
In 2022, Ukraine decreased exports of coke and semi-coke in physical terms by 98% compared to the previous year to 3,856 thousand tons, and in monetary terms by 97.6% to $1,011 million. The main exports were made to Hungary (42.63% of supplies in monetary terms), Georgia (37.69%) and Turkey (17.41%).
In 2022, Ukraine imported 359.192 thousand tons of coke and semi-coke, which is 54.5% less than in 2021. In monetary terms, imports decreased by 50.3% to $174.499 million. Imports were carried out mainly from the Russian Federation (43.43% of supplies in monetary terms, before the war), Poland (30.07%) and the Czech Republic (13.15%).
As a result of the war, a number of mines and coke plants are located in the territories temporarily not controlled by Ukraine.
The share of imported construction materials in the Ukrainian market increased from 14% in 2021 to 23% in 2023, and the domestic construction materials market needs systematic support from the state.
This opinion was expressed by Volodymyr Vlasiuk, CEO of Ukrpromvneshexpertiza, Chairman of the CCIU Committee on Industrial Modernization, during the round table “Building Materials. Preparedness for Market Needs for Recovery” held at the Interfax-Ukraine news agency on Tuesday.
“The share of imports in covering domestic consumption has increased from 14% in 202 to 23% in 2023. Thus, even the funds that go through the public procurement procedure can be largely used for imports. More research is needed on individual materials, but the upward trend in the use of imported materials in a developed industry is generally negative for the economy,” Vlasiuk said.
He said that the second study of the construction materials market and its ability to meet the country’s needs since the beginning of the war is currently underway.
“The situation is changing dynamically. But there are still no glass production plants, as before. There are several (investment) projects, but they are not yet operational. As for such commodities as PVC, production has resumed and capacities have increased. New capacities are being built in the cement industry. But electrical equipment is still not available, as it was before the war. This is still a field for investment projects that should be stimulated by the state,” Vlasiuk said.
The expert highlighted key issues that businesses will not be able to solve without government involvement.
“In terms of stimulating demand, the role of the state is huge, as it increases procurement (for defense and recovery projects). It is extremely important that these funds are not spent on imported materials. We understand the extraordinary conditions in which Ukraine exists, we are at war. Therefore, in accordance with international law, we can apply, for example, Article 21 of the WTO, which allows a country to temporarily suspend its obligations assumed when joining the WTO,” Vlasiuk said.
He emphasized the need to focus on localization, purchasing materials (for budgetary or donor funds) only if at least some of them are produced in Ukraine.
The issue of booking specialists is also important. “It is necessary to find a balance between the needs of the economy and the frontline. Both areas are necessary for the country’s sustainability,” he said.
Another key task is to provide autonomous energy supply. “Obviously, it is necessary to move to a model of autonomous energy supply, for example, from alternative sources, primarily solar power plants. The state, together with partners, should offer good, cost-effective tools, as this requires a significant amount of funds,” Vlasiuk said.
