Ukrzaliznytsia reduced iron ore export shipments by 28.6% m/m in September 2022

Ukrzaliznytsia (UZ) in September 2022 reduced the export transportation of iron and manganese ores by 28.6% compared to the previous month – to 1 million tons. Compared to August 2021, transportation of these ores decreased by 71.4%. This was reported to the GMK Center by the press service of UZ.

In January-September 2022, Ukrainian mining companies shipped 19.8 million tons of iron and manganese ores abroad by rail. This is 40% less than during the same period last year.

In connection with the start of the war between Russia and Ukraine, since March 2022, there has been a significant decrease in rail transportation of ores.

In general, since the beginning of the war (March-September 2022), Ukrzaliznytsia has transported 12.1 million tons of iron ore, while in January-February 2022 this index amounted to 7.64 million tons. The average monthly transportation index in March-September decreased to 1.73 million tons from 3.8 million tons in January-February.

In 9 months of 2022, UZ transported 117.8 million tons of cargo, which is 48.7% less than in January-September 2021.

The general structure of transportation by Ukrzaliznytsia in January-September 2022 was as follows:

• export transportation – 39%;
• domestic – 50%;
• import – 9%;
• transit – 2%.

As GMK Center reported earlier, in August 2022, UZ in August 2022 reduced export transportation of iron and manganese ores by 10.7% compared to the previous month – to 1.4 million tons. Also, the export transportation of ferrous metals decreased by 11% compared to the previous month – to 275 thousand tons.

After the invasion of Russia on the territory of Ukraine, domestic steel companies reduced the export of products to a minimum due to the blockade of sea ports. Steelmakers are looking for ways to ship their products through the railway infrastructure, but due to the influx of cargo, Ukrzaliznytsia and border crossings are unable to cope. In addition, this method of cargo delivery is unprofitable due to the two-fold increase in costs.

Problems with logistics are superimposed on unfavorable market conditions – iron ore prices are falling. As a result, Ukrainian mining and processing plants are forced to completely stop or reduce the iron ore production.

In 2021, UZ reduced transportation of iron and manganese ores by 2.7% compared to 2020 – to 77.6 million tons. Export transportation in 2021 fell by 3% y/y – to 44.6 million tons, and domestic – increased by 3.1%, up to 27.7 million tons.