In September Ukraine increased metal output by 3% YoY, according to the National bank recent report. The bank analysts have dubbed this “the breaking of falling tendency in metallurgy” and connected it to the ceasefire in the ATO zone.
The relative stabilization of the situation at Donbass restored the productive connections between companies and increased the capacities of the large manufacturers (Alchevsk Iron and Steel Works, Zaporizhstal, Avdiivka Coke and Chemical Works, etc). For example, the constant restoration of coke deliveries and the low comparative base increased its output by 51.1% YoY.
Still the experts are cautious as to positive estimates.
“Logistics and raw materials base situation improvement affected the industry rise. And the low cost of Hryvnia as to Dollar gives some competitive advantage when selling metal. But it is not a qualitative and stable rise yet, but a return to the 2014 levels”, says the Forex Club in Ukraine expert Andrei Shevchishin.
According to Concorde Capital analyst Roman Topolyuk, the steel capacities in Ukraine are still low – around 2 million tons per month. And even though that’s more than in February (1.5 million tons), output volumes are still behind October 2014.
Steel output fell after the start of the military activities in Donbass in August 2014. Alchevsk and Yenakievo Iron and Steel Works even had to stop their operation. And now their capacities are underloaded. Mariupol Ilyich and Azovstal Iron and Steel Works are also working with low capacities. (Ukrainian metal)