Ukrainian steelmakers increased rolled steel production by 17.5% m/m in August 2022

In August 2022, steel enterprises of Ukraine increased the production of rolled steel by 17.5% compared to July – up to 248 thousand tons. On an annual basis, production in August 2022 decreased by 6.8 times. This is evidenced by the Ukrmetalurgprom’s data.

Pig iron production in August 2022 increased by 20.9% compared to July – up to 335 thousand tons. Steel production in August 2022 amounted to 366 thousand tons, which is 30.2% more compared to the previous month. The production of crude steel and rolled steel products in August 2022 is the highest since the beginning of the war.

In January-August 2022, Ukrainian steelmakers reduced the production of rolled steel by 65.6% compared to the same period in 2021 – to 4.48 million tons. Pig iron and steel production during this period decreased by 64% y/y, to 5.15 million tons and 5.19 million tons, respectively.

The low production is connected with logistical problems, the unfavorable situation of the world market, as well as with the destruction due to hostilities of the two largest enterprises of Ukrainian iron&steel industry – Azovstal and Ilyich Iron and Steel Works of Mariupol.

After the Russian invasion of Ukraine at the end of February 2022, Europe became the only market for Ukrainian products. At the same time, it is difficult and expensive to deliver goods by rail. The costs of steelmakers for the shipment of rolled steel to customers increased at least by 2 times, and the demand for products fell due to unfavorable market conditions.

Due to the above-mentioned factors, Ukrainian iron&steel enterprises operate with a low level of capacity utilization and even temporarily stop its capacities. Zaporizhstal operates only two blast furnaces and is considering cutting production.

Kametstal works with 80% of production capacity utilization, and ArcelorMittal from July 2022 has swiched most of its employees to 2/3 workload schedules.

As GMK Center reported earlier, in 2021 Ukraine’s steelmaking companies increased steel production by 3.6%, to 21.37 million tons y-o-y. The production of rolled products increased by 3.5%, to 19.08 million tons, and pig iron by 3.6% – to 21.17 million tons y-o-y.