Non-ferrous metallurgy of Ukraine (2006-2007)

In the times of the Soviet Union, Ukraine’s non-ferrous metallurgy was part of the all-Union production chain, and specialized in production of aluminum, titanium, silicon, nickel, copper, germanium, scandium, mercury, zirconium, and uranium.

After the Soviet Union’s collapse, the industry faced a consumption crisis, which resulted in a shutdown in production of non-ferrous metals and their articles. As Ukraine rebuilt itself, the dynamics of non-ferrous metal export went rapidly up, especially of non-ferrous metal scrap. In 2000, the Verkhovna Rada (Supreme Council) of Ukraine adopted the Law “On metal scrap”, thus, bringing non-ferrous raw stock export shipments to order.

Nonetheless, non-ferrous metallurgy in Ukraine is a potent industrial sector. Statistically, the industry covers more than 70 enterprises of various owners, and employs over 50 ths. people. Thanks to positive trends on the world non-ferrous metal market, the situation in the industry has stabilized lately.

It is worth noting that almost 80% of Ukraine’s output of non-ferrous metals is shipped abroad because of low domestic consumption. But the local market keeps developing as each year goes by.

Raw stock base

Ukraine has a rich mineral and raw stock basis and is among the largest mineral and raw stock countries in the world. Its territory is home to more than 20 ths. deposits and ore outcrops of 114 kinds of minerals, of which 7,835 deposits of 96 mineral kinds have industrial importance and are recorded in the State Balance of Reserves. By mineral resource potential of rare metals, Ukraine is a leader in Europe and is known as a large ore province throughout the world

Regarding the ore base for non-ferrous metallurgy in Ukraine, the following minerals are produced: uranium, titanium, zirconium, germanium, graphite, nickel, gold, scandium, and hafnium. Also, deposits of minerals which are usually not associated with Ukraine have been discovered and explored: beryllium, niobium, tantalum, rare metals, copper, lead, zinc, and molybdenum.

Ukraine has a powerful mineral base of titanium: by gross resources, explored reserves of ilmenite ores outweigh the world ilmenite stock. 40 deposits are known, of which 12 have been thoroughly explored. The most important are deposits Irshavskoye and Stremigorodskoye (Zhitomir region), and Samotkanskoye (Dnepropetrovsk region).

The possibility to create a domestic resource base of copper is first of all related to native copper in basalts in trap formations, located in Volyn region. Ukraine is able to partially meet domestic demand for lead and zinc thanks to concurrent mineralization at the Muzhiyevskoye and Biganskoye explored deposits in Zakarpatye region, as well as at the Belyayevskoye deposit in Western Donbass.

Of extreme importance for Ukraine are aluminum ores, which are presently being imported to the country. The Pridneprovye area boasts the Vysokopolskoye deposit of ferruginous bauxites (Dnepropetrovsk region) and Smelyanskoye deposit (Cherkassy region).

With a rich mineral base and mature extractive industry, Ukraine is able to export serious volumes of ores and concentrate. At the same time, changes in market conjuncture in 2007 fostered adjustments in export structure as compared to 2006. Hence, exports of titanium ores and concentrates decreased their share to 80.4% from 86.0% seen last year, while manganese ores, on the contrary, expanded the presence from 6.3% (2006) to 9.5%.

The leaders among ores and concentrates imported in Ukraine in 2007 are aluminum ores (63.2% in gross volume), manganese ores (21.4%), and nickel ores (14.8%). Also the domestic market needs chromium ores and concentrates, titanium, molybdenum, zirconium, as well as vanadium ores.

Table 1. Export of ores and concentrates from Ukraine

Aluminum industry

The aluminum industry is one of the key segments of non-ferrous metallurgy in Ukraine. The output of aluminum and its alloys now approximates 200 ths. tons.

Although Ukraine has several dozens of companies producing secondary aluminum alloys and are involved in scrap processing of aluminum and its alloys, the cornerstone of the country’s aluminum industry includes only three enterprises, namely, Nikolayev Alumina Plant OJSC (NGZ), Zaporozhye Production Aluminum Works OJSC (ZAlK), and Intersplav JV.

The first two enterprises belong to top Russian aluminum producers– Rusal and SUAL, and the third company is a joint asset of Spanish and Ukrainian investors.

Nikolayev Alumina Plant OJSC is the largest CIS producer of alumina, which is the key raw for aluminum production. In 2006, the plant’s output was around 1.37 mn tons of alumina, which is almost 3% more than in 2005.

The blocks of ZAlK were designed for the production of 110 ths. tons of primary aluminum and primary alloys based on aluminum. The enterprise also makes alumina used mostly for in-house purposes. According to preliminary data, in 2006 the works produced 108.4 ths. tons of aluminum and alloys, as well as around 255 ths. tons of alumina.

Intersplav JV is the main Ukrainian producer of aluminum alloys, capable of producing up to 80 ths. tons of primary and secondary aluminum alloys per year. However, because of the shortage of raw stock and some other economic determinants, the company’s facilities have been recently used at approximately 40-80%.

Other notable manufacturers of finished products are JV CJSC Donetsk Plant of Aluminum Profiles and Collective Enterprise Kiev Plant of Aluminum Constructions, which produce aluminum profiles and metal structures.

The basis of secondary metallurgy in the aluminum segment consists of the following enterprises: ExpoMetal CJSC, Zaporozhye Plant of Non-Ferrous Alloys LLC, Mechanical Plant LLC, UkrSpetsMet LLC, KonturMet LLC, Obimet JV LLC, Donmetsplav LLC, TinImpex LLC, and Donsplav JV LLC.

Copper industry

OJSC Artemovsk Plant of Non-Ferrous Metals Processing (AZOTsM) is certainly the flagship of Ukraine’s copper industry. It is the only Ukrainian producer of flat and round rolled copper and its alloys. The plant is capable to produce copper, brass, copper-and-nickel rolled products and semis.

According to the results of 2006, AZOTsM production is estimated at over 48.5 ths. tons of finished products, and it is the major contribution to gross copper production in the country, which makes 65-80 ths. tons of products of copper and its alloys per annum. Around 80-85% of the plant’s output is supplied to the domestic market, as opposed to the rest of enterprises in the segment, which mostly have an export orientation.

These smaller companies include Catech-Electro LLC – one of the main producers of cable products in Ukraine, Pankom-Yun JV LLC (the company launched production of cathode copper), DonetskVtorZvetMet (Donetsk Secondary Non-ferrous Metals) Subsidiary Enterprise, Zaporozhye Plant of Non-Ferrous Alloys LLC, VtorMet (Secondary Metals) CJSC, TechnoScrap JV, EcoMetal LLC, and Bona LLC.

Lead industry

Ukraine produces some 50-60 ths. tons of lead presently. The largest Ukrainian producer of this metal and its alloys is Svinets (Lead) CJSC, whose annual production is now exceeding 10 ths. tons of lead and its alloys.

Consumers of the company’s output are mostly storage battery and cable plants of the CIS, in particular, the largest Ukrainian producer of storage battery articles – ISTA National JSC. Some of the volume of lead products is shipped to the Baltic States and Western Europe. Besides Svinets CJSC, other producers of lead articles in Ukraine are UkrSplav (Ukrainian Alloy) LLC, Megatex OJSC, EnergoSplav (Energy Alloy) Scientific and Production Enterprise LLC, as well as VladarMet LLC.

Titanium industry

The titanium industry is the only segment of Ukraine’s non-ferrous metallurgy which has almost complete production cycle starting from the extraction of titaniferous ores and ending with titanium dioxide production.

The Zaporozhye Titanium and Magnesium Works (ZTMK) state enterprise is the only Ukrainian producer of metallic spongy titanium. The works is presently making approximately 11 ths. tons of the article per annum. It is planned to expand production of spongy titanium up to 12.5 ths. tons until 2012. The works starts production of titanium ingots and alloys with the capacity of up to 3 ths. tons per year. At its own facilities, the works processes part of the output into semi products - titanium ingots, the rest (90-95%) is supplied to other enterprises – mostly, abroad.

Other Ukrainian producers of titanium semis are Anthares LLC, Titan Scientific and Production Center, FIKO JSC, and Zakarpatye Metallurgical Plant. Most of them produce ingots of titanium and its alloys both from sponge and titanium scrap and wastes.

Ukraine has no rolling facilities to process titanium semis, therefore, almost the entire volume of this product is headed overseas. At present, the possibility to launch pilot production of rolled titanium at some Ukrainian enterprises that have rolling capacities is being considered.

Ukrainian export of non-ferrous metals

Compared to 2006, the estimated volume of non-ferrous metals export from Ukraine in 2007 increased by 2.3% up to 244 ths. tons. Currency earnings from the exports in 2007 reached USD 989.9 mn, which is 11.1% more than in 2006. The corresponding figures of 2006 were 238.8 ths. tons and USD 890.6 mn.

The most valuable articles in Ukraine’s shipments of non-ferrous metals are the aluminum and copper groups, which account in aggregate 89.3% in the exports of 2007, whereas currency earnings from these groups’ shipments contributed only 79.7% to the gross figure of non-ferrous metal export.

Crude aluminum made 81.4% of currency earnings in the aggregate export of aluminum group in 2007 (89.0% in 2006). At the same time, export of primary aluminum and aluminum ingot alloys accounted for 8.2% and 37.4% respectively.

The articles dominating Ukraine’s export of copper in 2007 were unrefined copper and untreated copper alloys (43.9% in weight), flat rolled products (17.1%), as well as tubes (15.1%).

Export supplies of nickel, lead, zinc, and tin were not so notable. Their gross portion in non-ferrous metals export made correspondingly 6.3% and 5.6% of total physical exports and the volume of currency proceeds.

Ukrainian import of non-ferrous metals

According to preliminary data, the physical volume of imported non-ferrous metal products in 2007 grew by almost 5.9%, while their financial value added 33.5%. The gross volume of non-ferrous metals imported into the country in this period amounted to 198.4 ths. tons worth USD 1,076.2 mn. The figures of non-ferrous metals import in 2006 made respectively 187.4 ths. tons and USD 806.1 mn.

The groups that lead the way in Ukraine’s import of non-ferrous metals are aluminum, copper, and zinc groups, which account for joint 84.9% in gross physical volume of imports and 70.4% in total expenditures for non-ferrous metals import to the country.

Particular growth tempos were seen in the supplies of lead (58.9% in weight and 136.7% in currency proceeds), nickel (25.5% and 99.7% correspondingly), aluminum articles (22.4% and 36.1%), and lead (19.0% and 151.6%). Meanwhile, the volumes of metal products imported from the zinc group fell by 10.4% (physical terms) and 6.4% (import value).

Table 3. Export of non-ferrous metals from Ukraine

Table 5. Export of aluminum from Ukraine

Table 6. Import of aluminum to Ukraine (staple imports)

Table 8. Import of copper to Ukraine (staple imports)