METALWARE

UKRAINE

Last month’ forecasts that performance of Ukrainian metalware producers would fall below the 2000’ figures did come true. According to data with UkrMetiz Assn., Ukraine’s production of metalware in January-October 2001 curtailed by 4% as compared to the respective period of 2000. Hence, to hit the 2000′ total, in November-December average monthly output should touch 26.7 ths. tons, which is equal to the 2001 high. At the same time, as compared to September 2001, a 10% rise has been registered in production performance (Figure 1).

Major producers of metalware in Ukraine – OJSC Silur, Zaporozhye Steel Rolling Plant, and DneproMetiz, which account for aggregate 78% of metalware output in Ukraine, boosted production by 20%, 24%, and 29% respectively versus August 2001.

According to the State Statistics Committee of Ukraine, wire production in Ukraine kept on decreasing in September 2001. Enterprises of Ukraine manufactured total 8.8 ths. tons of various metal articles (table 1), which is 22% down from August’ figure. Zaporozhye Steel Rolling Plant cut output by 18% (production in August lost 16% against July), DneproMetiz – by 38% (in August – a 2% upturn), Silur – by 32% (in August -15%), Welding Metals – by 2% (in August – by 25%). Hence, in January-September 2001, wire output in Ukraine amounted to 121.5 ths. tons.

At the same time, after production slump in August, output of fastening articles in September added 3% and hit 1.9 ths. tons. In January-September 2001, aggregate production in the country came to 13.7 ths. tons of fastening articles. The largest Ukrainian producer of fastening articles – Druzhkovka Metalware Plant (contributed 66% to Ukraine’s output in September), boosted output of fastening articles by 7% in the period under review. Other large producers, namely DneproMetiz, Donex Ltd, Kharkov Metalware Plant (except for Donmash, which cut production), also increased production.

Scientific and practical seminar “Metalware production of the 21st century: problems and obstacles”, which was held in September 2001 at OJSC Silur premises, focused on problems of scientific and technological development of metalware industry. Should the problems be solved, integration into the European and global metalware markets would become more real opportunity. According to information of OJSC Silur, the seminar featured heads of metalware enterprises of Ukraine and other CIS countries. Besides to reports at plenary meetings, workshops embraced the following sections: wire production, cordage manufacturing, production of metal cord, problems of quality system application, reconstruction, upgrade, and power-saving in metalware industry, as well as accounting implementation. At the end of the seminar, participants favored the proposal to create branch department of Metalware Scientific Research Institute named after Merkachev upon OJSC Silur premises.

Wire

According to preliminary data on September and updated August figures, Ukraine’s export of wire in the two months dropped by 20% and 34% respectively. Comparing the figures to production decrease rates, further downturn in wire output may be forecast in Ukraine. However, data of UkrMetiz Assn. reveals upswing in wire production by major manufacturers in October. Taking into account regular rate of data correction, export in September 2001 is expected at some 7.5 ths. tons. Hence, decrease should come to 15-20% as compared to August 2001 and 40-45% versus September 2000 (though, the figure was calculated approximately, and ultimate indicator will be effected by several other factors). Nonetheless, September-November 2000 was successful period for Ukrainian wire manufacturers – exports totaled 12-15 ths. tons. Thus,. comparing the 2000′ results to 2001 figures, export is likely to go down.

The largest shipments of wire in September 2001 were made by Silur. The company contributed 21% to Ukraine’s wire export, Welding Metals added 19%, DneproMetiz – 18%, Zaporozhye Steel Rolling Plant – 13%, and StalKanat formed 10%. Supplies from Ukraine were bound for 25 countries, top consumers were Greece (22%), Germany (21%), Russia (11%), Belarus (8%), and Uzbekistan (6%) (figure 2). Reduction of wire export was mainly caused by smaller supplies to Russia (by 1-2 ths. tons) and Italy (also by 1-2 ths. tons depending on the period).

At the same time, with the mentioned trends in wire production and export, import of the article is on increase. In September 2001, wire supplies to Ukraine grew by 68% versus August and by weighty 91% as compared to September 2000. According to preliminary data, Ukraine imported some 650 tons of wire in September. Main suppliers were Russia (68% in total import to Ukraine) and Belarus (23%). In the light of lower supplies of the Ukrainian wire to Russian market, it should be noted that Russian enterprises expanded shipments to Ukraine by 49% versus August and by 51% against September 2000.

Export market for Ukrainian wire reports prices on upturn (table 2). Average price for wire made USD/t 274 in July, USD/t 301 in August, and USD/t 325 in September. However, prices’ upward movement is likely to result from changes in export commodity structure (some increase in the portion of alloy wire). The price for wire shipped to the CIS reported lesser increase (July – USD/t 353, August – USD/t 357, and September – USD/t 364).

Reported consumption of wire in September is estimated at 3.6 ths. tons. The figure is the result of import trends (figure 3) (September saw the high in 2001′ import at 650 tons), its share in consumption did increase from 13% to 18%.

Cable and cordage

According to updated information, in August 2001, Ukraine’s export of cordage amounted to 2.4 ths. tons. According to preliminary data (export equal to 1.7 ths. tons), even if export in September shrinks, decrease will be small, and export supplies are likely to get stable further on.

By and large, in the third quarter (July-September) 2001, Ukraine’s foreign trade in cordage has weakened greatly. As compared to previous period of 2001 and July-September 2001, export of the article dropped by respectively 19% and 4%, and import was 32% and 27% down. The reason was decrease in Russia-bound supplies by 1.5 ths. tons in July-August 2001versus April-June 2001. At the same time, export of Ukrainian cordage by Bulgarian companies was 600 tons more than in the previous period.

The largest exporters of cable and cordage from Ukraine in September 2001 are Khartsyzsk-based Silur and StalKanat from Odessa. These contribute 82% and 12% respectively to total shipments of Ukrainian cordage in September 2001.

In September, exports of Ukrainian cable and cordage from Ukraine headed mainly to Bulgaria (43%) and the RF (32%). Much lower shipments were destined for Uzbekistan (8%), the Czech Republic (3%), and Poland (2%) (figure 4).

Import of cable and cordage to Ukraine curtailed by 40 tons compared to August and made 115 tons in September 2001. The supplies were mostly of Russian origin.

The trend evolved towards decrease in export prices (table 3). As the table reveals, downturn was registered at every single market.

As part of cooperation between OJSC Silur and Russia’s CJSC KurskRezinoTechnics, Silur is through with processing of the second testing industrial lot of 7.5 mm dia galvanized metal cable into special conveyer belt (output comprised 4 RTLTC-2500 х1200 belts up to 300 m long).

Upon the order of Kazakhstan consumers, OJSC Silur manufactured 61.5 mm dia steel cable.

The enterprise informs that one of Silur’ steel wire making workshops commissioned another furnace equipped with economic flat-flame burners. Flat flame and more effective emitting thermic rays save 50% of gas consumption. The patenting unit has changed gas supply to isothermic decay bath. Gas consumption saving is some 30%. For more efficient maintenance of nitre melt temperature, air would be automatically supplied through burner devices.

To expand the market for tyre armoring bead wire, OJSC Silur takes measures to improve packaging and exclude its return when supplied to consumer. OJSC Dneproshina (Dnepropetrovsk) has obtained the first batch of bead wire in Z-coils.

As regards interior consumption of cordage in Ukraine, estimation is hard due to absence of accurate production data and sizable stock present at warehouses (according to Silur’s information, sales are continuously run). Considering the available information, monthly consumption is at some 1.5-2 ths. tons.

Fastening articles

Taking into account preliminary data on Ukraine export of machine building fastening articles, one would expect export supplies of this type of fastening articles to increase upon September results. In August 2001, Ukraine’s export of railway fastening articles went sizably up (figure 5): as compared to the previous month – by 255% and as compared to 2000′ respective period – by 50%. However, in this case, by-month comparison does not indicate any growth trend, as general export dynamics for railway fastening articles has a leaping nature.

In January-September 2001, export of machine-building fastening articles from Ukraine made 8.8 ths. tons, while shipments of railway articles amounted to 92 ths. tons, which was 24% and 15% up from the respective figures of 2000.

In terms of geographic distribution, Ukraine’s supplies of machine building fastening articles in September 2001 were as follows: more than half of shipments headed to Russia, followed by Iran, Moldova, Poland, and the Czech Republic (figure 6). As regards railway fastening articles, exported by Ukrainian companies in September 2001, China accounted for 79%, the USA – for 8%, and Vietnam – for 7%.

In January-September 2001, Ukraine’s import of railway fastening articles arrived mainly from the RF. Major importers of machine-building fastening articles were again the RF (43%), as well as Taiwan (22%), Germany (8%), the Czech Republic (7%), and Poland (7%).

As regards prices: average price for machine building fastening articles exported from Ukraine grew from USD/t 520 to USD/t 662, average price on import market rose from USD/t 1,054 to USD/t 1,242. At the same time, average price for railway fastening articles on Ukraine’s export market fell from USD/t 150 to USD/t 117, and average price on import market curtailed from USD/t 435 to USD/t 375.

Registered consumption of machine-building fastening articles in September went 6% down to 1.7 ths. tons.

RUSSIA

Metal-Ukraine with reference to Metaltorg.ru web-site informs that October 11, 2001, Cherepovets Steel-rolling Plant hosted regular meeting of the Board of Directors of PromMetiz Assn., which summarized performance of the Association’s enterprises on Russian metalware market. Participants mentioned that effective demand of Russian consumers for metalware products kept on increase.

Russian producers maintain up-going production of ferrous metal products – in the 9 months of 2001, enterprises within PromMetiz Assn. manufactured 1,147.9 ths. tons of metalware, which is 19% up from the respective figure of 2000. Production capacities, though, were only used by 36.7%.

Selected enterprises of the Assn. report the following production indicators (table 4). In the 9 months of 2001, Cherepovets Steel-rolling Plant boosted metalware output by 6.5% as compared to the respective 2000’ period (in 2001, the company’s output made 369.6 ths. tons of metalware, which accounts for 32% of total production by PromMetiz’ members and 20% of Russia’s output of metalware). Upturn of metalware production at Magnitogorsk Metalware and Metallurgic Plant was 6.7%, Volgograd Steel Wire and Cordage Plant – 46%, Saratov Metalware Plant – 28%, and Vyartsilsky Metalware Plant – 6%. At the same time, Magnitogorsk Sizing Plant cut production by 12% to 60.4 ths. tons in January-September 2001.

BELARUS

In January-September 2001, (table 5), metalware production at Rechitsky Metalware Plant and Belarus Metallurgical Plant summed to 119.2 ths. tons, which outruns the respective figure of 2000 by 7%, including a 19% at Rechitsky Metalware Plant and only a 3% production upswing by Belarus Metallurgical Plant.

As concerns manufacturing of selected articles, Rechitsky Plant increased wire production by 62% and output of fastening articles by 19% as compared to the respective period of 2000. Belarus Metallurgical Plant raised manufacturing of various wire by 6%. The latter, however, reduced wire production in September by 1% versus September 2000, which results from scheduled repair period of wire producing mill -150.

Table 1. Estimated registered consumption of key metalware articles in Ukraine in January-September 2001

Table 2. Dynamics of export prices for Ukrainian wire in July-September 2001, USD/t

* Supplies of alloy wire were reported (bulk in volume)

Table 3. Dynamics of price movements for cordage and metal cord exported from Ukraine in 2001, USD/t

Table 4. Metalware production in the Russian Federation, January-September 2001*

* According to Metal-Courier’ data

Table 5. Metalware production in Belarus in 2001*, tons

* According to Metal-Courier’ data

Alexander SIRYK, expert with DerzhZovnishInform