ArcelorMittal Krivoy Rog PJSC (AMKR) Krivoy Rog Mining and Metallurgical Plant is hoping for an improvement in the power supply situation in the first half of this year and an increase in production from the current 25% to 50% of the plant’s capacity, the plant’s CEO Mauro Longobardo said.
“We can’t produce more than 25 percent because we don’t have enough energy. Once we have stable energy, we can increase production … and get to 50%,” he said on the sidelines of a business forum on the rapid recovery of Ukraine in Luxembourg, organized by the Ukrainian-Luxembourg Business Club.
Longobardo clarified that the company is currently operating at 25 percent for both ore and steel production, and consumes about 125 MW, compared to the pre-war normal consumption of about 450 MW.
The CEO also added that AMKR started importing electricity after the government’s recent decision and is now happy with the result, although the price of imports adds to the negative impact on the cost of production.
According to him, despite the low utilization rate, the entire team of 26,000 employees is retained, of which about 10,000 to 12,000 are employed in production depending on the day, but assistance is also provided to others. “We are investing in keeping all of our people during this year,” the general manager said.
He said that with an adequate power supply, a further 50 percent capacity limitation is already due to logistical problems. As Longobardo pointed out, AMKR is actively developing new routes alternative to the pre-war sea routes, but tentatively the new destinations to Poland and southern Ukraine will only allow for 50 percent production.
“We just need to test them when we have 50 percent available,” the general manager added.
According to him, without the resumption of work of the main ports of Ukraine, the combine will not be able to export products or provide imports of coal. Longobardo clarified that now AMKR works entirely on Ukrainian coal, as the work of the route of traditional coal imports from Kazakhstan from another “subsidiary” ArcelorMittal is currently interrupted.
At the same time, he stressed that there are other obstacles on the way to increasing production to 50%. First, Longobardo explained, the power supply must be reliable, since the plant has three blast furnaces, of which one is still operating. Going to 50% would mean working with two blast furnaces, since the third one is the largest, and a sudden stoppage of the furnace in case of power supply problems is fraught with damage.
The second major problem the general manager cited was rising production costs and logistics. “Cost is already killed. When I tell you logistics are possible, it’s true. But it’s $100 per ton more expensive than what I was paying before,” Longobardo noted.
He clarified that previously the transport shoulder to the port of Nikolaev was 250 km, there were also river deliveries, whereas now it is 1500 km to Gdansk and more costs for transshipment due to the different gauge in Ukraine and Europe.
“ArcelorMittal Kryvyi Rih is the largest producer of rolled steel in Ukraine. It specializes in the production of long products, particularly rebar and wire rod.
As previously reported, in 2022, the plant reduced the output of rolled steel by 77% compared with the previous year – up to 1.1 million tons, steel – by 76.3% to 1.2 million tons, iron – by 71% to 1.6 million tons.
Iron ore production fell last year by 56%, to 11.6 million tons, and concentrate production fell by 57.2%, to 4.2 million tons.
Concrete market in 2022 fell in 5 times, reinforced concrete – three times, the general director of Kovalskaya PSG Sergei Pilipenko said in an exclusive interview with Interfax-Ukraine.
“The concrete market has fallen almost five times, reinforced concrete – three times. A lot of production space has been lost due to military operations. Many of the (existing) producers may not survive the year,” – said Pilipenko.
At the same time the CEO of the group noted that the construction of new housing showed the lowest dynamics, and 2022 market lived mainly at the expense of commercial construction and infrastructure
Kovalska Construction Group has been working on the construction market of Ukraine since 1956. It unites more than 20 enterprises in the sphere of extraction of raw materials, production and construction. The production is presented by brands “Concrete from Kowalska”, “Avenue”, Siltek and others. The enterprises of Kowalska operate in Kyiv, Zhytomyr, Lviv, Kherson and Chernihiv regions.
In addition, the group includes Kovalska Real Estate, which is engaged in construction of residential buildings in Kiev. Its portfolio includes 20 completed residential projects.
The electricity deficit has slightly decreased due to increased production, but remains at a significant level and is still insufficient to cover consumption in full, NEC Ukrenergo said.
“After repairs, two units at thermal power plants returned to the grid. At the same time, one unit was taken out for emergency repairs. Also during almost all day there is the import of electricity from other countries,” described the situation “Ukrenergo” in its daily update in the Telegram channel.
At the same time, according to the system operator, power consumption is gradually increasing due to the intensification of frost, with a more rapid increase expected tomorrow with the beginning of the working week.
The company confirmed the information previously promulgated by the network operators on the introduction of limits of consumption in the regions only for the period from 16:00 to 20:00.
The exceptions are the Kyiv and Odesa regions, where there are network restrictions.
In particular, emergency shutdowns continue in Odessa and nearby areas due to a large-scale accident at one of the substations of Ukrenergo.
The company assured that together with the Odessa regional military administration and the regional energy company its specialists are developing reserve schemes of connecting Odessa and nearby areas, and repair teams of Ukrenergo and the regional energy company are working around the clock to eliminate the consequences of the accident and the quickest resumption of power supply.
As reported, since Sunday morning, in order to avoid accidents due to equipment overload, stabilization shutdowns have been introduced in Goloseevskyi, Solomenskyi and Pecherskyi districts, as well as on the Left Bank of the capital. In the Kiev region, restrictions will be applied in Kiev-Svyatoshinsky district. Due to the accident, there is also temporarily no light in Fastivsky and Vasylkivsky districts of Kyiv region.
On Friday evening and then on Saturday morning a large-scale accident occurred at one of the substations of Ukrenergo, as a result of which Odessa and the Odessa region were out of electricity. According to data as of the evening announced by Herman Galushchenko, head of the Ministry of Energy, one third of consumers were connected to the grid.
Agro-industrial group of companies Ovostar Union, one of the leading producers of eggs and egg products in Ukraine, in 2022 reduced the production of shell eggs by 9% compared with 2021 – to 1.55 billion units, and sales – by 6%, to 1.08 billion units.
According to a group report posted on the Warsaw Stock Exchange website on Tuesday, Ovostar increased its egg exports by 27% to 290 million eggs last year, which pushed the share of foreign shipments in its sales up 4 p.p. – The company’s share of foreign sales rose four percentage points to 27%, up from 23%.
“Supply chain issues, additional export and import regulations, internal and external migration, temporary occupation of some territories in the first half of the year, and power outages in the second half of the year forced the company to cut investments in new stock and streamline other processes. Although by the end of 2022 the total flock was down 14%, the group was able to mitigate the impact of negative factors, resulting in a decline in production of only 9%,” the holding quotes its general director Boris Belikov in a report.
According to him, last year egg sales dropped only 6% down, which was partly due to a decrease in egg processing. In addition, the holding benefited from the dynamics of world prices of eggs and egg products in the shell.
Ovostar also processed 427 million eggs in 2022, which is 15% less than in 2021. At the same time, at the end of the first nine months of last year the lag was 10% against the nine months of 2021.
Ovostar Union’s bird population as of December 31, 2022 was 7.2 million birds (down 14.3% from the same date a year earlier), including 6 million laying hens (-14.3%).
Last year, Ovostar’s sales of dry egg products decreased by one-third compared to 2021, to 2,13 thousand tons, and their export share in total sales was 68%, while in 2021 it was 64%.
In turn, sales of liquid egg products during this period decreased by 26% to 10.62 thousand tons, their share of exports was 40% compared to 28% in 2021.
According to the report, 2.54 thousand tons of dry egg products were produced in 2022 (-6% compared to 2021), and liquid egg products – 10.79 thousand tons (-24%).
The average selling price of shell eggs last year increased by 34% in UAH terms against 2021 and reached 2.9 UAH/ piece, while in USD the increase was 13% – to $0.09/ piece. The average selling price for dry egg products doubled in UAH equivalent to 277.94 UAH/kg, and rose 71% in USD – to $8.59/kg, liquid egg products – 42% in UAH, to 66.79 UAH/kg, and 20% in USD – to $2.06/kg.
Ovostar Union is a vertically integrated public holding company, one of the leading producers of shell eggs and egg products in Europe. The producer has been a certified exporter to the EU since 2015.
The group’s holding company, Ovostar Union N.V., held a 25% IPO on the Warsaw Stock Exchange in mid-June 2011 and raised $33.2 million. The majority stake in the company is owned by Prime One Capital Limited, which is controlled by its CEO Boris Belikov and Chairman of the Board Vitaliy Veresenko.
“Ovostar reported $1.65 million in net income for 2021, down 38 percent from 2020. Its EBITDA was down 29% to $5.7 million, while revenue increased 35% to $133.3 million.
OJSC “Carton and Paper Company” (Lviv), major Ukrainian producer of carton sleeves and sanitary products, in 2022 increased production volume by 51.5% as compared to 2021 – up to UAH 1 billion 186 million.
According to statistics provided to agency “Interfax-Ukraine” statistical association “UkrPapir” in terms of volume the company slightly increased the output of paper-base for hygiene products – up to 7.04 thousand tons, while increasing the production of toilet paper rolls by 43% – to 4.1 million pieces.
Production of cardboard products also increased slightly (1.1%) – to 26.7 thousand tons.
As reported with reference to statistics “UkrPapyr”, the mill has continued to work all months from the beginning of this year, reducing the output of paper and paperboard in March (to March 2021), but in April has already gone to a positive trend, which remained in the following months.
“Carton and Paper Company” (until 2011 – “Lvivkartonoplast”) produces products and semi-finished products from waste paperboard (cardboard sheets, corners, sleeves), cellulose and recycled waste paper (toilet paper, towels, napkins TM Papero).
The owners of the company are four individuals, three of whom own equal shares of nearly 27.78%, one – 16.67%.
In 2021 the company produced UAH 782.7 mln worth of products, which is 47% more than the year before.
The U.S. Department of Agriculture has lowered its forecast for global rice production in 2022-2023 due to deteriorating crop prospects in China and a number of other leading medium-grain rice-producing countries.
Global rice production is expected to be 502.97 million tons, lower than the December forecast (503.27 million tons) and previous years’ results (514.95 million tons in the 2021-2022 season), the agency said in a review.
Significant production declines in the 2022-2023 marketing year are expected in major medium-grain rice producing and exporting countries, including the United States, Australia, and the European Union.
In the U.S., due to drought weather in California, production of medium- and short-grain rice could drop 31% from the 2021-2022 crop year and be at a record low since the 1972-1973 season, the nation’s Agriculture Department forecasts. Rice prices on the domestic market have jumped 50% from last season’s level. Export prices are also on the rise, which could result in exports being the lowest on record since 1998-1999. Historically, the largest export markets for U.S. rice have been Japan and South Korea. They remain key markets as required under the WTO, but limited volumes have been tendered in recent tenders due to declining interest from suppliers, given reduced supply and rising U.S. prices.
The country’s rice production forecast was lowered to 5.09 million tons from the December estimate of 5.22 million tons, exports to 2.15 million tons from 2.25 million tons.
In the EU in the season 2022-2023 is expected to fall by 25% rice production, the figure may be the lowest since the season 1984-1985. The main producers of rice in the EU (80% of the volume) are Spain and Italy, and both countries have faced severe drought and lack of water for crops. Rice production in the EU is expected to be 1.29 million tons compared to 1.72 million tons last season, exports will decrease slightly (to 400 thousand tons from 440 thousand tons). At the same time, imports of rice to the EU may turn out to be a record, amounting to 2.7 million tons. Historically, long-grain rice has historically accounted for the bulk of supplies, but in recent years the share of medium-grain rice imports has been growing.
China, which is the world’s largest producer of medium-grain rice, could cut production to 145.95 million tons in the 2022-2023 crop year (the previous estimate was 147 million tons from 148.99 million tons last season. Despite some decrease in harvest, prices are likely to remain competitive in the world market, given the impressive stocks. The forecast for Chinese rice exports for the 2022-2023 season is 2.2 million tons (estimate unchanged). The main importers of Chinese rice are Asian and African countries.
The world’s largest rice exporter, India, could deliver 20.5 million tons to world markets this season, the forecast was raised from the December estimate of 20 million tons). Also, the U.S. Department of Agriculture raised its forecast for India’s rice production by 1 million tons to 125 million tons.
Rice export estimates from Thailand and Vietnam remained unchanged at 8.5 million tons and 7.4 million tons, respectively.
The forecast for global rice exports in 2022-2023 was raised to 54.38 million tons from 53.76 million tons.
