The quality of Ukrainian steel is low, while its prime cost is high.
“Ukrainian ferrous metallurgy has long been in the system crisis as the result of technical and technological backwardness. Company owners never really wanted (nor do they want now) to invest in modernization. Let’s take, for example, the open-hearth steel making – it consumes 5 times more energy carriers and 15 times more gas than the converter process. Open-hearth steel accounts for just 3.6% in the world output. At the same time, 46% of it is produced in Ukraine”, said Vyacheslav Butko, the Center for corporate researches vice-president.
World demand for ferrous metals falls, while the abundance of capacities in the world steel industry reaches 20% and will, most probably, increase further.
The high capital-output ratio, rough competitiveness and the wave-like demand for steel on the world markets have brought old Ukrainian metal companies to a low-profit operation that could soon turn into profitless.
The expert believes in the medium term Ukrainian metal industry will face hard times – the life time of many metal companies, except for the newer mini-works, is limited by the wear of their equipment. (Ukrainian metal)