Mining and metallurgical industry (January-April 2009)
Dynamics of metallurgical production continued to be formed under influence of external markets, which keep determining production rates of this export-oriented industry.
According to the State Statistics Committee data, in January - April, 2009 comparing to the corresponding period of previous year, production volumes in metallurgical production and production of finished metallic goods decreased by 43. 8%.
Inexses's dynamic of production volumes in metallurgical production and production of finished metallic goods
By results of January-April 2009 enterprises of metallurgical complex produced:
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pig iron – 7.8 mn tons;
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steel (excluding semi-finished products) – 4.8 mn tons;
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steel pipes – 0.4 mn tons;and
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finished rolled steel products – 4.9 mn tons.
In the same period, production of basic metal products in physical expression decreased versus the last year’s respective period :
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pig iron – by 35%;
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steel – by 49.9%;
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finished rolled steel products – by 41.6%; and
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steel pipes – by 44.7%.
According to the State Statistics Committee data, in January - April 2009 in comparison the first 4 motnhs of 2008, output volumes in mining operations, except for fuel and energy, lost 35.4%.
According to Metallurgprom Production Union data,inJanuary-April 2009 mining enterprises produced:
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Iron ore– 18.6 mn tons;
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Iron ore concentrate – 15.2 mn tons;
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Agglomerate– 10.9 mn tons; and
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Rolled briquettes – 5.8 mn tons.
In January - April of current year corresponding to analogical period of previous year, production volumes of iron-ore products went down :
Iron ore concentrate – by 28%;
iron-ore agglomerate – by 35%;
iron-ore rolled briquettes – by 22%;
iron ore– by 30%.
In April, 2009 comparing to March of current year average daily production showed the following dynamics:
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pig iron – decreased by 3.9% (to 64.3 ths. tons);
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steel – by 7.1% (to 71.4 ths. tons);
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finished rolled metal - by 5.5% (to 66.7 ths. tons);
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coke – increased by 6.7% (to 44.9 ths. tons);
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concentrate – also increased by 3.5% (to 129.8 ths. tons);
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average daily production of agglomerate and rolled briquetts lost 9.1% (to 131.4 ths. tons).
Production fall in April versus the previous month of this year was related foremost to lower steel demand at external markets, where overproduction is observed. This resulted in exporters’ losses at external markets, as well as at domestic market influenced by falling volumes of construction, car production, and metal production for Ukrzaliznytsia State Railway Company.
Thus, at present situation, steel traders decreased purchases, and enterprisesdo not increase neither production volumes nor volumes in warehouses.
During 3 months of 2009, export of rolled steel from Ukraine was 1,115.2 ths. tons, that is by 41.6% less than indicators of 2008.
Products of low processing, such which need subsequent treatment for getting more technological products,prevail in commodity structure of export of steel industry products.
Moreover, worsening of commodity structure of Ukrainian export should be mentioned. So, if by results of the 1 half-year of 2008, the share of semi-finished products in export was 46%, long products – 24%, then at the end of 2008 part semi-finished products contributed 54% to the exports, long products – 12%. Finally in April of this year, rolled steel accounted for 58.9% in total exports.
At the same time, the situation with steel prices at external markets does not improve , which negatively influenced markets for domestic steel producers. The latter can not compete with world producers because of high unit cost of their products caused by swift price decline for steel at foreign markets during the last 6 months.
In April of current year comparing to the previous month, export prices on rebars, cold-rolled and hot-rolled steel remained unchanged and were correspondingly USD/t 400, USD/t 570, and USD/ton 445, for rolled steel and sections – decreased correspondingly by 1.25% and 6.25%, and were USD/ton 395 and USD/ton 420.
About price situation at internal market
Declining demand at domestic as well as external markets continued to influence price formation in steel industry in April 2009.
Thus, according to the State Statistics Committee data in April 2009 comparing to March 2008, industrial producers’ price index by types of economic activity was:
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Mining operations – 94.3%;
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Coke production – 97.1%;
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Metallurgical production and production of finished metal products – 100.2%.
Thanks to measures taken by the Ukrainian Government and directed to support metallurgical enterprises, the companies reduced their expenses and decreased product unit cost to certain extent. This allowed to restrain price decline at internal steel market in April 2009, and even somewhat increase prices for some types of steel products .
Internal prices for cold-rolled and hot-rolled steel stayed at the level of March of current year and were correspondingly USD/ton 570 and USD/ton 445, for rebars and rolled metal in the same period increased accordingly by 17.8% and 2.1%, for sections price in domestic market lowered by 5.7% from USD/ton 478 to USD/ton 451.
About remains of steel products
According to information of SE Ukrpromzovnishexpertyza, as of April 29, 2009, supplies of rolled metal in Ukrainian ports were 1,270 ths. tons, including 682 ths. tons of Ukrainian production, that is correspondingly 103.2% and 121.3% of December index of previous year.
Import of iron ore raw stock during 4 months of 2009 was 1,014 ths. tons, that is by 34% less than for analogical period of previous year.
Import of iron ore concentrate increased by 26.2% to 720.2 ths. tons, while import of rolled briquettes reduced by 75.8% to 99.8 ths. tons, sintering ore – by 68.8% to 171.9 ths. tons.
Export of iron ore raw stock during 4 months of 2009 was 7,022 ths. tons, that is by 10.7% less than the previous year indicator.
Thus, export of iron ore concentrate increased by 36.1% and was 2,862 ths. tons, while export of sintering ore diminished by 54.6% and was 1,158 ths. tons, export of rolled briquettes increased by 1.3% and was – 3.0 mn tons.
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