According to Metallurgprom in June Ukraine reduced steel smelting by 13.5% MoM compared to May to 2.46 million tons, finished products – by 24.1% to 2.15 million tons. Thus, in H1 Ukraine produced 16.34 million tons of steel, which is 17.9% more than in the same period last year, and 14.53 million tons of finished products.
The most decrease of production has been shown by the still mills of the ISD holding – DMKD (86.2%) and Alchevsk Iron and Steel Works (70.8%). Zaporizhstal has the best results – 1.36% only.
Mr. Sergey Matviyenkov, Deputy Chairman of the Board of Ilyich Steel, said “The main reason for drop in production is correction of prices in global market. In early April to May it was dramatic growth of steel prices first because of iron ore price increase by 90% to 100% and then it was abrupt fall of the metal price till the end June.”
Mr. Vyacheslav Popov, Deputy Head of Mining and Metallurgical Department of DZI, said “Traders who managed to fill up their stocks in April have taken waiting position what led to recession of demand.”
Mr. Ivan Dzvinks, analyst at Eavex Capital, said for DMKD and Alchevsk Iron and Steel Works that “Unfavorable market situation was deepened by problems with natural gas and raw materials supplies. In June the enterprises of ISD were at the edge of stop because of their indebtedness to Naftogaz Ukrayiny. In particular, natural gas pressure to DMKD was reduced three times and all its blast furnaces were transferred to gas-free regime.”
Mr. Sergey Gayda, analyst at Dragon Capital, believed that there would be no further fall of metal production in Ukraine in summer months. He said that “Lower prices and reduction of stocks of traders will bring the buyers back to the market.”
Mr. Sergey Matviyenkov, Deputy Chairman of the Board of Ilyich Steel, said “The main reason for drop in production is correction of prices in global market. In early April to May it was dramatic growth of steel prices first because of iron ore price increase by 90% to 100% and then it was abrupt fall of the metal price till the end June.”
Mr. Vyacheslav Popov, Deputy Head of Mining and Metallurgical Department of DZI, said “Traders who managed to fill up their stocks in April have taken waiting position what led to recession of demand.”
Mr. Ivan Dzvinks, analyst at Eavex Capital, said for DMKD and Alchevsk Iron and Steel Works that “Unfavorable market situation was deepened by problems with natural gas and raw materials supplies. In June the enterprises of ISD were at the edge of stop because of their indebtedness to Naftogaz Ukrayiny. In particular, natural gas pressure to DMKD was reduced three times and all its blast furnaces were transferred to gas-free regime.”
Mr. Sergey Gayda, analyst at Dragon Capital, believed that there would be no further fall of metal production in Ukraine in summer months. He said that “Lower prices and reduction of stocks of traders will bring the buyers back to the market.”
Mr. Vyacheslav Popov agreed with him “In July consumers in the Middle East, which is the major sales region for Ukrainian steel, are in the threshold of Ramadan and are going to try to replenish their stocks”. (Rusmet)