FERROUS METALS

UKRAINE

According to the data with Metallurgprom Association, in January-February of 2001, Ukraine manufactured 4,266 ths. tons of iron, 5,292 ths. tons of steel, and 4,016 ths. tons of finished rolled metal. Iron output is 7.5% up, steel output – 12.2% up and rolled metal – 23.2% up from the production figure in the respective period of 2000.

The data on production of iron, steel and rolled metal in Ukraine in January-February of 2000 and 2001 are presented in Table 1.

Export

In the first two months of 2001, Ukraine exported some 4,409 ths. tons of metal products worth USD 721,219 ths. This almost equals last year’s export figure both in terms of physical volume and export revenues.

In the period under review, the main export articles were semis (mainly square billets and slabs). Some 1,427 ths. tons of these metal products were exported to the international market (32% in the total export turnover of metal products in terms of physical volume). Export prices were quite stable for the few consecutive months already (USD/ton 150-160 FOB) due to persistent demand.

Flat rolled metal in the opening two months of 2001 ranked the second in terms of export’s physical volume (23% or 1,031 ths. tons). Supplies of HR flat metal were down by 4% and those of CR flat metal – by 17%. This is connected with less favorable situation on the markets of Southeast Asia and general glut of this metal product on the world market. In February 2001, prices for Ukraine-made HR coils went up and totaled USD/ton 160-180 FOB, prices for HR plates did not change (USD/ton 170-200 FOB), whereas prices for CR flat metal reduced to USD/ton 230-250 FOB.

Raw materials (metal scrap, ferroalloys and iron) ranked the third in the list of export articles. These products accounted for some 21% in Ukrainian export (or 957 ths. tons). Some 659 ths. tons of metal scrap, 146 ths. tons of iron, and 152 ths. tons of ferroalloys were exported in the period under review.

Long product supplies (rebars and wire rod) also accounted for a significant share in Ukraine’s export. In the first two months of 2001, 746 ths. tons of this commodity were exported, which is 17% up from the respective figure in the last year. Export of rebars increased by 45%, while export of wire rod reduced by 24%. Price tendencies were the same: in the period under review, prices for rebars rose up to USD/ton 180-190 FOB, whereas prices for wire rod decreased down to USD/ton 170-180 FOB.

Table 2 shows the data on Ukraine’s export of metal products in January 2000 and 2001.

REGIONAL PATTERN

In the first two months of 2001, regional distribution of Ukrainian exports of metal products did not change as compared to the respective period of 2000.

Middle East and Southeast Asia remained the main sales markets for Ukrainian metal products. Exports to these markets accounted for 32% (or 1,388 ths. tons) and 30% (1,301 ths. tons) respectively in metal product shipments from Ukraine in January-February 2001. Besides, export supplies to these regions continued to grow, and in January-February 2001 increased by 5% and 11% correspondingly.

Export to the CIS market also increased in the period under review by 30% in terms of physical volume (up to 358 ths. tons) and by 63% in terms of export revenues (up to USD 107,759 ths.).

In January-February 2001, some 238 ths. tons of metal products worth USD 41,137 ths. were exported to African market. Physical export volume went up by 5%, and export earnings – by 5.5%.

EU

EU-bound exports of Ukraine-made metal products accounted for 8% in Ukraine’s total export of the commodities. However, supplies of high-processed finished rolled metal to this region in January-February 2001 were insignificant. Quotas imposed on exports of Ukrainian rolled metal on the one hand, and high competition on this market on the other hand disallowed Ukrainian exporters to step up supplies to this region.

The main articles of exports were semis, including slabs and billets, (50% or 207 ths. tons), ferrous waste and scrap (23% or 94 ths. tons), and iron (12% or 50 ths. tons). Exports of semis and iron boosted by 14% and 96% respectively, whereas exports of metal scrap fell by 16%.

USA

In the period under review, exports of Ukrainian metal products to the US market decreased considerably – by 79% down to 95 ths. tons. This is connected with less favorable situation on American market, as well as with possibility of introducing antidumping sanctions.

The main articles of USA-bound exports from Ukraine were wire rod (44% or 42 ths. tons), HR flat metal (12.5% or 12 ths. tons), and iron (31% or 30 ths. tons).

China

The first two months of 2001 saw an increase in supplies of Ukraine-made metal products to Chinese market. The supplies increased by 10% and totaled 615 ths. tons.

The main articles of exports to China were semis (68% or 418 ths. tons), HR flat metal (17% or 110 ths. tons), and CR flat metal (12% or 72 ths. tons). There were no supplies of wire rod and bars registered in the period under review.

Turkey

In the two opening months of 2001, export of metal products from Ukraine to Turkey decreased by 21% down to 512 ths. tons as compared to the respective period of 2000. This occurred due to reduction in supplies of HR flat metal (by 32% to 87 ths. tons), semis (by 54% to 57 ths. tons), as well as other metal products. The only export article that featured an increase in terms of physical quantity was ferrous waste and scrap (up by 21% to 305 ths. tons).

Russia

Russian market continued to attract Ukrainian exporters of metal products due to its high level of the commodity consumption. Over the first two months of 2001, 264 ths. tons of metal products were exported to Russia, which is 68% up from the respective 2000′ figure.

Increase in supplies was registered for all export articles. Export of rebars rose by 93% to 45 ths. tons, of HR flat metal – by 28% to 37 ths. tons, of galvanized flat rolled metal – by 82% to 21 ths. tons, and that of CR flat metal – by 33% to 16 ths. tons. Exports of bars surged as high as 3 times (from 22 ths. tons in January-February 2000 to 68 ths. tons in 2001).

Data on regional distribution of Ukraine’s export of metal products are shown in table 3.

Import

Since Ukrainian metallurgic enterprises prefer to export their produce, supplies of rolled metal to the domestic market were low. This was one of the reasons for increase in imports of metal products in Ukraine in 2000.

Thus, in 2000, some 385 ths. tons of metal products worth USD 203,196 ths. were imported in Ukraine. This exceeded 1999 imports by 2.3 times in terms of physical volume. The main import articles were rolled alloyed steel (24% or 91 ths. tons), semis, mainly round billets (22% or 83 ths. tons), rebars (11% or 41 ths. tons), and HR flat metal (8% or 32 ths. tons).

Table 4 shows the data on Ukraine’s import of metal products in 1999 and 2000.

EXPORT 2000

Square billets

Square billets are used in manufacturing of long products (rebars and wire rod) by further re-rolling at a rolling mill. This Ukrainian metal product is one of the most popular commodities of Ukraine’s metallurgic industry. Many foreign companies are interested in purchasing it, since this makes manufacture of rebars and wire rod less time- and fund-consuming. Thus, export of this rolled metal is high.

Dynamics of square billet export was quite stable in both quantitative and price respects. The peak of supplies was registered in the first and second quarters of 2000, when world markets were experiencing a seasonal upswing. In the following months supplies somewhat decreased. However, the prices featured a small rise, and by the end of the year practically did not changed (see diagram 1 and table 5).

 

Diagram 1. Dynamics of Ukraine’s square billet export in 2000

Billets from Ukraine were exported mainly by iron & steel works and big metallurgic corporations. The main companies exporting square billets were Dneprovsk ISW named after Dzerzhinsky (22%), Yenakievo ISW (16%), Donetsk Industrial Union (8%), Industrial Union of Donbass (8%), Azovstal ISW (7%), and Alchevsk ISW (6%).

The main countries importing Ukraine-made square billets were those with developed metal rolling industry and insufficient raw base: China (25%), Taiwan (17%), Egypt (9%), Turkey (8%), and Thailand (5%).

Slabs

Like square billets, slabs are also used for further re-rolling and manufacturing of flat rolled metal – sheets, plates and coils. However, this metal product is less popular and its liquidity depends very much on the situation on the world market for flat rolled metal.

Over the first and second quarters of 2000, demand for slabs both on the international and Ukrainian domestic markets was high. Therefore, prices for the commodity were the highest. In the following months, situation on the world market for flat rolled metal became less favorable, which resulted in reduction in export prices and volumes (see diagram 2).

 

Diagram 2. Dynamics of Ukraine’s slabs export in 2000

Ukrainian-made slabs were exported to the following countries: Italy (20% of the total export of this metal product), USA (19%), China (14%), South Korea (9%), and Macedonia (8%).

The main exporters of slabs were the following metallurgic enterprises of Ukraine: Ilyich ISW (46%), Azovstal ISW (28%), Donetsk Industrial Union (7%), Industrial Union of Donbass (6%), and Zaporozhstal ISW (5%).

MARKET SITUATION

Billets

In February-March 2001, signs of stabilization appeared on the world market for square billets.

A boost in demand for this metal product was registered on the Southeast Asia market. This resulted in the rise of the market prices by USD/ton 1-3 on average up to USD/ton 178-180 CIF. It is expected that growth in purchases by Chinese, Taiwanese, and Philippine metallurgic enterprises will call forth further increase in prices.

In March 2001, Ukrainian and Russian exporters of square billets managed to raise export prices to USD/ton 155-160 FOB. It has been forecasted that China will boost billet purchase volumes in the near future, and this will lead to some increase in prices.

Growth in demand on the markets of Southeast Asia and Latin America allowed raising Turkish export prices a bit in March 2001. In March, they equaled to USD/ton 163-170 FOB.

Prices on other regional markets (EU and Latin American markets) did not change in March and corresponded to those in February.

Long products (rebars and wire rod)

After the Chinese New Year holidays in the end of February, Chinese market for long products became more dynamic in March 2001. However, no positive changes in prices were registered. Demand was still unsatisfactory, and prices for imported rebars and wire rod were fixed at USD/ton 170-180 CIF.

Beginning of seasonal construction works in the countries of South America resulted in growth of demand and, correspondingly, prices on Brazilian market (up by USD/ton 5-10 to USD/ton 195-220 FOB for rebars and to USD/ton 215-230 FOB for wire rod).

In February-March 2001, prices for long rolled metal on the American market stabilized. This became possible due to protective measures undertaken by the US government in respect to import, and increase in sales prices set by American enterprises.

Tendencies on the world market affected CIS exporters as well. In March, prices for rebars increased by USD/ton 10-15, and for wire rod – by USD/ton 5-10.

World prices for rebars are presented in table 8. World prices for wire rod are shown in table 9.

Hot-rolled plates

For the few consecutive months, world market for HR plates continues to be stable due to steady demand for this metal product.

American market for flat rolled metal started to recover. A number of protective measures undertaken to limit imports and expected increase in sales prices set by American plate manufacturers strengthened the market. During March 2001, plates were offered at the market at USD/ton 320-340 CIF.

As soon as the first quarter of 2001 started, most CIS exporters announced their intention to cut prices for almost all flat rolled metal products, including HR plates. This was caused by less favorable situation on the main sales markets for this metal product. Thus, in March prices fell by USD/ton 10 down to USD/ton 175-205 FOB.

Prices on the EU and Latin American markets did not change in March 2001.

Table 10 shows world prices for HR plates.

Hot-rolled coils

Over March 2001, in a number of regions (the EU, Turkey, and China) prices for HR coils did not change and stayed at the last month’s level.

Unfavorable situation on the world market in February called forth reduction in export prices by Russian and Ukrainian exporters. However, starting from the middle of March the prices somewhat increased and reached USD/ton 150-180 FOB. This became possible due to boost in demand for coils in the countries of Southeast Asia and Middle East, and also beginning of import license issuing in China.

The biggest US metallurgic companies predict market recovery in the second quarter of 2001. They affirmed their confidence by announcements of an increase in sales prices. In March, the price for imported HR coils on this market was set at USD/ton 240-245 CIF, which is up by USD/ton 10-12 as compared to February figure.

Brazilian metallurgic enterprises manufacturing HR coils managed to raise export prices a bit. As of the end of March, the prices were set at USD/ton 220-245 FOB.

World prices for HR coils are presented in table 11.

Alexander SHEIKO, expert with DerzhZovnishInform

Table 1. Production of cast iron, steel, and rolled steel in Ukraine, ths. tons.

Table 2. Export of metal products from Ukraine

Table 3. By-region distribution of Ukrainian metal exports

Table 4. Metal product import to Ukraine

Table 5. Average export prices for Ukrainian billet in 2000, USD/MT

Table 6. Average export prices for Ukrainian slabs in 2000, USD/MT

Table 7. World prices for billets, USD/MT

 

Table 8. World prices for rebars, USD/MT

Table 9. World prices for wire rod, USD/MT

Table 10. World prices for HR plates, USD/MT

Table 11. World prices for HR flat coil, USD/MT