Buying steel, metal (iron, bars, wire rod, billets, channel, I-beam, plate, sheet, coils, angle, strip) from Ukraine

Favorable conditions and high prices for steel and iron at the world market have profound effect on rapid development of Ukrainian mining and steel industry.

General overview and key indicators.
According to the International Iron and Steel Institute (hereinafter “IISI”) top-ten steel-producing countries this month were China (41,583 million tons, comparing to previous year + 13,6%), Japan (9,966 million tons, + 3,7%), the USA (8,5 million tons, + 0,5%), Russia (5,833 million tons, - 2,3%), South Korea (4,125 million tons, + 2,9%), Germany (3,968 million tons, + 2,5%), India (3,85 million tons, - 5,5%), Ukraine (3,618 million tons, + 2,3%), Brazil (2,94 million tons, + 4,5%) and Italy (1,613 million tons, - 11%). Main steel-producing countries (98% of global steel production) melted this month 108,076 million tons of steel and iron, which is 5,3% more comparing to previous month.
In line with the IISI data top-ten countries produced the following volumes of steel within 8 months: China (320,525 million tons, comparing to 8 months of previous year + 17,7%), Japan (79,401 million tons, + 3,9%), the USA (65,252 million tons, - 3,5%), Russia (48,321 million tons, + 3,1%), South Korea (33, 896 million tons, + 6%), Germany (32,509 million tons, + 4,2%), India (28, 432 million tons, - 6,1%), Ukraine (28,432 million tons, + 5,2%), Brazil (22,135 million tons, + 10,6%) and Italy (20,798 million tons, + 0,8%).
Comparing to previous year iron ore production in Ukraine also increased 12,6% and amounted to almost 25 million tons. Because steel and metals are much in demand now, it substantially increased the volume of scrap metal purchase by Ukrainian steel mills. Only in last 5 months the figure rose 23,5%, which is 2,2 million tons. Reducing the export duty, increased export of Ukrainian ferrous scrap from 185 to 225,5 thousand of tons.

Ukrainian steel and iron market trends.
This year all major Ukrainian steel mills significantly increased production: melting of steel increased 6% around 41 million tons, finished steel +7% up to 36 million tons and iron + 7% almost 33 million tons. Fortunately, the pessimistic forecasts of experts, who predicted collapse of Ukrainian steel sector this year didn`t come true and key players rather easily overcame last year`s Russian gas price surge. Favorable conditions of the world steel and iron market had a positive influence on the sector and domestic market. First of all, price for steel rose on the world market and secondly raw materials (mainly coke) became cheaper on domestic market. In addition, the whole year Ukrainian mining enterprises and steel mills actively invested in renovation and modernization of production (around $ 1,5 billion).

Ukrainian metallurgy – is an export-oriented branch of Ukrainian industry. Around 80% of all produced steel, iron and metal products are exported abroad. Successful trade in metals on international market is not only a basis for strong metallurgy, but also for the whole Ukrainian economy, because steel and iron production accounts to almost 25% of GDP and around 40% of all financial earnings of the country.

In developed countries 80% of mining and steel industry products are sold internally and used as raw material for production of ready-made integrated goods, like cars for example. 44% or 13 million tons of Ukrainian steel exports account to semifinished products. Ukrainian steel makers instead of substantial processing and sales of value added products prefer big volumes and profits from exports.

From year-to-year achieving high result for Ukrainian steel producers is becoming harder and harder: Chinese companies are expending their sales in the North Africa, as well as Europe, the USA and Canada, having overproduction of steel, is also becoming more protected. According to official statistics depreciation of metal plants equals to about 70%, power-consumption of Ukrainian steel makers is 1,5-2 times higher than of their European counterparts, 50% of all steel products are made by out-dated equipment. Some of these trends, strict competition and gas price surge forced Ukrainian steel producers to modernize and combine different enterprises into vertically integrated and specialized production chains. All business and reconstruction plans are intended to modernize production, decrease costs and increase quality of products.

In order to attract capital to achieve the above-mentioned goals, many leading producers in the sector have publicly placed their shares for sale (IPO). For example, Ukrainian Ferrexpo AG placed 25% of its shares at the London stock exchange and gained 213 million pounds.

All major Ukrainian steel makers predict increase in steel and iron production in the coming years.