The Ukrainian government and the country's mining and metallurgical companies have agreed to fix the Q2 2010 domestic steel prices at the level of April 1 this year.
The agreement was reached within the memorandum (MoU) of understanding between the parties from November 2008, the prolongation of which was signed on April 1, 2010. The local steel prices in Ukraine increased amid their growth in foreign markets. In March 2010, the steel products prices in the Ukrainian domestic market increased by about 30 percent month on month, while their production costs are by 1.5-2 times lower compared to the pre-crisis level (summer 2008).
Accordingly, in order to be able to keep steel product prices at the current levels, those who agreed to the memorandum (including the country's largest steelmakers such as Metinvest, Evraz, ArcelorMittal Kriviy Rih, Ilyich, Zaporizhstal, and ferroalloy producing companies) also agreed that there is a need to fix also the prices for raw materials, including iron ore, ferroalloys and coke.
According to Ukrainian financial-industrial group Altcom, by fixing the domestic steel prices, the steelmakers are helping the construction industry to emerge from crisis. A slight recovery was registered in the Ukrainian construction industry; however, most of the companies do not have steel products in stocks, and the growth of steel product prices would lead to a rise in the cost for housing, as well as to an adjustment towards increase of costs of infrastructure projects, including projects for Euro 2012.