Steel remains the basic structural material, while steel outputs and consumption signal the economic and technical progress of certain regions. It is beyond doubt that the countries with adequate local metalmaking facilities have great advantages, notably
EXPORT POTENTIAL OF UKRAINIAN METALMAKING
Steel remains the basic structural material, while steel outputs and consumption signal the economic and technical progress of certain regions. It is beyond doubt that the countries with adequate local metalmaking facilities have great advantages, notably as regards the opportunity to integrate into the international economy.
The last decade has introduced major adjustments to the global steel market. The principal changes have been called forth by political and economic transformations in Central and Eastern Europe, namely by collapse of the USSR and the Soviet bloc and by emergence of newly independent states (the Commonwealth of Independent States). Since the late 1980s, the share of CIS metallurgy in global production has halved. At the same time, China and Southeast Asia have been boosting outputs and consumption of steel.
Prior to 1991 the Ukrainian metalmaking was an integral component of the Soviet metallurgy. Jointly with the other socialistic states, the USSR used to account for up to a third of the world steel production. Even today Ukraine holds a significant piece of Eastern European metalmaking, while metallurgy and chemical industry of Ukraine contribute almost a half to the country’s export potential.
After breakdown of the USSR and appearance of the CIS, the Ukrainian metalmaking still reflects the trends and fashions of the past, e.g. Ukraine keeps on making a significant portion of open-hearth steel (up to 50% of the country’s steel output), with only 3.3% of steel being produced in electric arc furnaces and barely 18.4% of steel being continuous-cast. Steel consumption in Ukraine barely totaled 82.5 kg per capita in 1999, some 5 to 8 times as low as in the developed countries and 1.5 times as low as in the Russian Federation.
Though exports of major iron and steel articles had been persistently shrinking since 1989, the export figures started growing up to 11.5 million tonnes in 1995 and totaled 20.5 million tonnes in 1999. Semis, billets, and conversion iron accounted for the bulk of this growth, while export supplies of rolled steel have remained virtually unaltered throughout this period (with 44.3% of the total in 1999). This drives to a conclusion that the export pattern has deteriorated because back in 1995 rolled steel articles made up 64.7% of the total exports. Sure thing, this brought in less export revenues, e.g., though physical metal exports gained 25% in 1997-1999, export revenues reduced 22% down.
The 1998 Asian financial crisis most badly impacted the developing countries and transitional economies, including Ukraine. The aftermath was evident even in 1999, when metal exports lowered by 8.7% against the previous year. Altogether, Ukraine exported various goods worth more than USD 11.5 billion in 1999, with metals (mainly, iron and steel) retaining the leadership in exports and accounting for 32% of the country’s total export.
The economic swifts on the global scale made Ukraine’s metallurgical mills engaging in active search for new markets and even working with the petty 1,000-tonne-and-less orders. The 1997-1999 crises resulted in a considerably wider distribution of Ukrainian metal export. Exports mainly increased owing to greater purchases in Asia (this region consumed 55% of the Ukrainian metal exports in 1999). Ukrainian-made metal articles won strong demand on this market owing to their relatively low cost and high consumer properties. Regardless the evolving financial crisis and its aftereffects in Asia, Ukraine steadily exported more than 5 million tonnes of metal per year to this region in 1997-1999 (in fact, exports exceeded 6.8 million tonnes in 1997). It is just that different importing countries once in a while altered their purchases of selected commodities. For instance, back in 1996 Thailand was among the largest trade partners of Ukraine purchasing almost 1.5 million tonnes of metal per year, whereas in 1999 steel exports bound to this country shrank almost fivefold. At the same time, Taiwan took the first lane in metal imports from Ukraine and imported more than one million tonnes of Ukrainian metal in 1998. The Philippines and Indonesia make stable purchases of Ukrainian-made steel. Ukrainian metal is still attractive for the huge Chinese market. Ukraine annually exported 3.7 to 4.2 million tonnes of metal to this country back in 1997-1999 with ever-increasing physical exports of semis, billets, and ferroalloys.
It is noteworthy that semi-finished products and bars made up more than 80% of Ukrainian metal exports to Southeast Asian countries. The share of semi-finished steel in exports to almost all SE Asian states has increased, thus mirroring the crisis’s impact on the pattern of Asian steelmaking. It is interesting that China, Taiwan, Malaysia, and Singapore continue being stable consumers of hot-rolled sheet steel made in Ukraine. Hence, it is quite understandable why Ukrainian steelmakers keep an eye on the problems faced by Southeast Asian economies. Since the most dynamic integration processes of the 21st century will take place precisely in SE Asia, this market will remain attractive for Ukrainian steelworks for quite a long time to come. Exports to the Middle East are rapidly building up, though this market has a small capacity and will not be able to seize the leadership in the near future.
Ukraine exported mostly long products and semi-finished steel to Europe. Eastern European countries, notably Poland, the Balkan States, and Italy (which predominantly imported semis), have been the major consumers lately. It is unlikely that Ukrainian metal exports to this region will increase because EU member-states have imposed import quotas against Ukrainian-made metal.
The year 1999 saw shrinking exports of Ukrainian rolled steel to the USA, along with booming exports of conversion iron, which seems to point out an opening market niche. African countries are amplifying imports from Ukraine from 2% of the Ukrainian metal exports consumed in 1994 all the way to 8% in 1999, with long products and flat-rolled steel being the main Africa-bound Ukrainian commodities. The very same steel products are exported to the former USSR, though competition with Russian manufacturers pushes down the share of exports to this region.
Over the last five years there have been no more or less prominent changes in the portion of Ukrainian metal exports dispatched to the most attractive developed economies, e.g. Europe and America account for some 25%. Executive authorities in these states do their best to strictly regulate their markets; thus metal exports from Ukraine can further grow only in case of supplies via the third countries.
The iron and steel industry of Ukraine significantly boosted the outputs in the first 5 months of 2000. Compared to the first 5 months of 1999, iron output gained a 12% increase from 8.9 million tonnes to 10 million tonnes; steel output rose by 16% from 10.8 to 12.6 million tonnes; while production of rolled steel increased by 1% from 8.3 to 8.4 million tonnes.
Table 1 presents the statistics on outputs of Ukrainian metallurgical mills in January-May 2000.
The continuing recovery of the world markets has encouraged further growth of Ukrainian metal exports. Throughout the first 4 months of 2000 Ukraine exported some 8.6 million tonnes of metal (+12.6% against the respective period of 1999) worth more than USD 1,358.2 million (+33%). As usual, physical exports are dominated by semi-finished steel, including billets and slabs, that accounts for 32.5% of the total metal exports; hot-rolled flat steel with 17.4% of the total; ferrous scrap and refuse with 15%; reinforcing bars with 10%; wire rod with 5.7%; and cold-rolled flats with 4.7% of the total.
Exports gained volume owing to input of greater supplies of semi-finished steel, +22.8% to
2.8 million tonnes; HR flat steel, +11.6% to 1.5 million tonnes; CR flat steel, +10.6% to 408,500 tonnes; wire rod, +49.7% to 492,000 tonnes; and bars, +32.7% to 182,400 tonnes. Rebar exports increased only a tiny bit by 0.6% against the respective period of 1999 and reached 866,700 tonnes. At the same time, iron exports suffered a setback in January-April 2000 and came to 575,000 tonnes, 13% down against the last year’s figure. The product mix of Ukrainian metal exports is shown in table 2.
As ever before, Southeast Asian economies are the main markets for Ukrainian metal articles in 2000, so far consuming 27.32% of Ukrainian metal exports. This period witnessed a 20% drop in exports to SE Asia, while the portion of exports engulfed by the Middle East increased 12 percentage points and equaled 25.8% of the total, i.e. more than 2.22 million tonnes. Ukraine almost doubled supplies of iron and steel to Eastern Europe, exporting 972,000 tonnes of products to this destination point in the course of January-April 2000. Finished rolled steel at rather acceptable prices was the principal export article. Exports bound to North American countries reached 1 million tonnes, that is twice as much as before, whereas export revenues coming from this region enlarged 3.2 times. Almost all the exports in this direction were made to the USA, with greater supplies of iron and semis being the main causes for expanded export turnover.
Besides, Ukrainian companies kept on stepping up metal exports to EU member-states. This region obtained 724,000 tonnes of Ukrainian metal, 4% up against the first 4 months of 1999. As the CIS market for rolled steel calms down after the 1998 Russian turmoil, Ukrainian exporters are slowly regaining the once-lost positions on this market. During the first 4 months of 2000, physical metal exports from Ukraine to this region increased by 41.5% to 566,000 tonnes and yielded 40.8% more export revenues. Table 3 contains the figures on distribution of Ukrainian metal exports by regions of the world.
Ukraine is still among the largest global suppliers of semis and raw materials. These commodities, e.g. scrap, semi-finished steel, iron, and ferroalloys, accounted for 57.4% of the total physical metal exports from Ukraine and for 46.8% of export revenues during the first 4 months of 2000. While physical export of Ukrainian iron and steel grew 12.6%, export revenues gained 33%, thus illustrating the mark-up in prices for the metal articles exported. Boosting export turnovers reflect poor demand for Ukrainian rolled steel on the domestic market, thus forcing metallurgical mills to fully rely on exports. This situation is evidently traced on the example of flat-rolled steel.
The World Bank estimates the Ukrainian GDP to add to 4% in 2000, with growth tempos increasing by 2.3 percentage points against 1999. The favorable export trends are already in place and the recovering global economy more than definitely foreordains the upswing of business activity in Ukraine.
Expanding their export opportunities, Ukrainian metalmakers offer new types of products that rival the international standards in terms of composition and properties. Here is the proof – more than 80 types of Ukrainian-made construction, shipbuilding, and structural rolled steel articles, tubes, pipes, and various metal products have been certified by the renowned international classification societies, namely British and German Lloyd’s, American Shipbuilding Bureau, American Tube Institute, Norske Veritas, German TUF, Dutch TNO, etc. Ukrainian metal, which has been tailor-treated to meet the customers’ DIN, ASTM, and JIS standards, is successfully exported to the USA, China, France, Germany, Belgium, South America, Middle East, and Southeast Asia.
It is worth giving a special heed to antidumping procedures carried out in the leading steelmaking countries, notably those European. Re-exports of Ukrainian-made metal are among the reasons for penalties against Ukrainian steelworks. The problem stems from uncoordinated business activities of small exporters adjusting to the market-type trade relations. At this point of time, this process has been virtually brought to a stop since privatization in metallurgy causes consolidation of exporting businesses, thus giving manufacturers a chance to have tighter controls over their products.
Since the world economy is booming now, one can forecast greater demands for steel and further markup in prices in the coming 18 months. Utilization of world productive capacities is increasing, though metallurgical mills are experienced enough not to go to the extremes and amplify utilization step by step in order to prevent oversupply and lower prices. In this situation, Ukrainian metalmaking has rather optimistic prospects. The estimate figures of Ukrainian metal exports in 2000 and 2005 are presented in table 4. Therefore, despite all the hardships, the Ukrainian metallurgy is getting over the backwardness and gradually integrates into the global market.
Table 1. Outputs of Ukrainian metallurgical mills in the first 5 months of 2000 (‘000 tonnes)
Наименование завода Mill |
Чугун Iron |
Сталь Steel |
Прокат готовый Finished rolled steel |
|
1 |
Макеевский МК Makeyevka Iron & Steel Works (ISW) |
316.0 |
413.0 |
337.0 |
2 |
Енакиевский МК Yenakievo Metallurgical Works (MW) |
734.0 |
824.0 |
227.0 |
3 |
МК "Азовсталь" Azovstal ISW |
1,397.0 |
1,753.0 |
730.0 |
4 |
Донецкий МЗ Donetsk MW |
187.0 |
459.0 |
246.0 |
5 |
Донецкий МПрЗ Donetsk Metal Rolling Works |
0.0 |
0.0 |
27.0 |
6 |
Краматорский МК Kramatorsk ISW |
45.0 |
15.0 |
9.0 |
7 |
Константиновский МЗ Constantinovka MW |
0.0 |
0.0 |
4.0 |
8 |
МК им.Ильича Ilyich ISW |
1,765.0 |
2,267.0 |
1,278.0 |
9 |
Алчевский МК Alchevsk ISW |
846.0 |
1,156.0 |
941.0 |
10 |
"Криворожсталь" Krivorozhstal |
2,160.0 |
2,376.0 |
1,995.0 |
11 |
МК им.Дзержинского Dzerzhinsky ISW |
907.0 |
947.0 |
821.0 |
12 |
"Запорожсталь" Zaporozhstal |
1,198.0 |
1,568.0 |
1,285.0 |
13 |
МК им.Петровского Petrovsky MW |
500.0 |
360.0 |
314.0 |
14 |
“Днепроспецсталь” Dneprospetsstal |
0.0 |
201.0 |
108.0 |
15 |
МЗ им. К.Либкнехта K. Liebknecht MW |
0.0 |
234.0 |
43.0 |
ВСЕГО TOTAL |
9,962.0 |
12,574.0 |
8,363.0 |
Таблица 2. Структура объемов украинского экспорта металлопродукции в январе – апреле 1999-2000 годов Table 2. Ukrainian export of metal products in January-April 1999-2000 |
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Продукция Commodity |
Количество Physical supplies |
Стоимость |
||||||
1999 г., тыс. тонн 1999 (‘000 tonnes) |
2000 г., тыс. тонн 2000 (‘000 tonnes) |
Структура, % Percentage in total turnover |
% изм. 2000/1999 Percentage change year-on-year |
1999 г., тыс. USD 1999 (‘000 USD) |
2000 г., тыс. USD 1999 (‘000 USD) |
Структура, % Percentage in total turnover |
% изм. 2000/1999 Percentage change year-on-year |
|
Арматура Rebars |
861.83 |
866.79 |
10.06 |
100.6 |
148,530.60 |
155,028.36 |
11.41 |
104.4 |
Г/к плоский прокат HR flat steel |
1,344.56 |
1,500.72 |
17.43 |
111.6 |
191,624.40 |
276,584.49 |
20.36 |
144.3 |
Катанка Wire rod |
329.28 |
492.92 |
5.72 |
149.7 |
49,762.32 |
83,999.09 |
6.18 |
168.8 |
Лом черных металлов Ferrous scrap |
1,192.18 |
1,297.21 |
15.06 |
108.8 |
80,626.99 |
98,603.24 |
7.26 |
122.3 |
Полуфабрикаты Semi-finished steel |
2,283.08 |
2,804.00 |
32.56 |
122.8 |
271,569.60 |
383,065.40 |
28.20 |
141.1 |
Прокат из лег. Стали Rolled alloy steel |
185.73 |
145.85 |
1.69 |
78.5 |
34,201.50 |
41,106.80 |
3.03 |
120.2 |
Прочая металлопродукция Other metal products |
69.23 |
61.95 |
0.72 |
89.5 |
20,272.31 |
16,046.74 |
1.18 |
79.2 |
Прочий плоский прокат Other flat-rolled steel |
42.15 |
50.07 |
0.58 |
118.8 |
13,164.40 |
16,425.10 |
1.21 |
124.8 |
Сортовой прокат Bars |
137.47 |
182.48 |
2.12 |
132.7 |
26,890.95 |
33,053.82 |
2.43 |
122.9 |
Ферросплавы Ferroalloys |
168.74 |
226.13 |
2.63 |
134.0 |
61,072.20 |
95,212.51 |
7.01 |
155.9 |
Х/к плоский прокат CR flat steel |
369.34 |
408.59 |
4.74 |
110.6 |
72,306.66 |
99,928.18 |
7.36 |
138.2 |
Чугун Iron |
661.76 |
575.73 |
6.68 |
87.0 |
51,048.61 |
59,179.47 |
4.36 |
115.9 |
ИТОГО TOTAL |
7,645.35 |
8,612.44 |
100.00 |
112.6 |
1,021,070.53 |
1,358,233.19 |
100.00 |
133.0 |
Таблица 3. Географическая структура украинского экспорта металлопродукции в январе – апреле 1999-2000 годов Table 5. Distribution of Ukrainian metal exports by regions of the world in January-April 1999-2000 |
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Регион Region |
Количество Physical supplies |
Стоимость |
||||||
1999 г., тыс. тонн 1999 (‘000 tonnes) |
2000 г., тыс. тонн 2000 (‘000 tonnes) |
Структура, % Percentage in total turnover |
% изм. 2000/1999 Percentage change year-on-year |
1999 г., тыс. USD 1999 (‘000 USD) |
2000 г., тыс. USD 1999 (‘000 USD) |
Структура, % Percentage in total turnover |
% изм. 2000/1999 Percentage change year-on-year |
|
Африка Africa |
500.53 |
449.85 |
5.22 |
89.9 |
78,121.25 |
75,573.72 |
5.56 |
96.7 |
Ближний Восток Middle East |
1,982.69 |
2,222.85 |
25.81 |
112.1 |
204,241.62 |
290,488.02 |
21.39 |
142.2 |
Восточная и Центральная Европа Eastern and Central Europe |
456.94 |
972.54 |
11.29 |
212.8 |
77,688.92 |
158,101.08 |
11.64 |
203.5 |
ЕС EU |
696.95 |
724.29 |
8.41 |
103.9 |
96,946.53 |
123,341.41 |
9.08 |
127.2 |
Северная Америка North America |
461.01 |
1,002.18 |
11.64 |
217.4 |
46,547.02 |
153,370.41 |
11.29 |
329.5 |
СНГ CIS |
400.02 |
566.01 |
6.57 |
141.5 |
105,948.30 |
149,190.63 |
10.98 |
140.8 |
Страны Балтии Baltic States |
35.53 |
40.46 |
0.47 |
113.9 |
9,827.82 |
10,499.00 |
0.77 |
106.8 |
ЮВА Southeast Asia |
2,934.15 |
2,352.76 |
27.32 |
80.2 |
376,441.74 |
351,529.90 |
25.88 |
93.4 |
Южная и Центральная Америка South and Central America |
71.43 |
91.93 |
1.07 |
128.7 |
8,824.29 |
16,041.43 |
1.18 |
181.8 |
Южная и Юго-Западная Азия South and Southwest Asia |
106.10 |
188.30 |
2.19 |
177.5 |
16,483.04 |
29,960.49 |
2.21 |
181.8 |
ИТОГО TOTAL |
7,645.35 |
8,612.44 |
100.00 |
112.6 |
1,021,070.53 |
1,358,233.19 |
100.00 |
133.0 |
Таблица 4. Прогноз экспорта продукции черной металлургии Украины на 2000 и 2005 годы Table 4. Estimate iron and steel exports from Ukraine in 2000 and 2005 |
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Продукция Commodity |
2000 |
2005 |
||||
Объем мирового экспорта, млн. тонн Global exports (‘000,000 tonnes) |
Экспорт Украины, млн. тонн Exports from Ukraine (‘000,000 tonnes) |
Доля экспорта Украины, % Ukraine’s share in global exports (%) |
Объем мирового экспорта, млн. тонн Global exports (‘000,000 tonnes) |
Экспорт Украины, млн. тонн Exports from Ukraine (‘000,000 tonnes) |
Доля экспорта Украины, % Ukraine’s share in global exports (%) |
|
Чугун Iron |
14.00 |
1.50 |
10.70 |
15.00 |
2.00 |
13.3 |
Полуфабрикаты Semi-finished steel |
43.00 |
8.50 |
19.70 |
45.00 |
7.50 |
16.6 |
Плоский прокат Flat-rolled steel |
119.00 |
6.20 |
5.20 |
129.00 |
7.00 |
5.4 |
Длинномерный прокат Long products |
55.00 |
6.10 |
11.10 |
55.00 |
5.00 |
9.1 |