In March-April of the current year, the steel market in the
CIS and in the world stabilized a little, leading to stabilization in the world
consumption of
iron ore, which is currently at high levels. This in turn led to an increase in
iron ore prices.
This rise in the world
iron ore demand was particularly due to increasing steel
production in the East and Central
Europe region. The rise in
pig iron output in the region started to be seen at the end of the fourth quarter of 2005, which led to an increase in
iron ore exports' volumes from the
CIS states in general and from
Ukraine in particular.
Another factor affected the world prices of
iron ore is the rise in demand of
iron ore in
China. Thus, the export of pellets from the
CIS to
China increased dramatically during 2005: from
Ukraine by 867,000 tons to 938,000 tons and from
Russia by 3.552 million tons to 4.486 million tons. This sharp rise in the export volumes from the
CIS to
China affected first of all domestic
CIS consumers and consumers in the East
Europe.
In March-April of 2006,
China's demand for imported
iron ore started to rise again mainly because of rise in domestic
production of
pig iron and establishment of favorable conditions in the market for finished steel products. In the process of lowering of the domestic inventories of
iron ore, Chinese consumers started to buy more and more of the materials in the spot market causing the spot market prices to move upward.
Those tendencies in
China's market for
iron ore affected much the Ukrainian domestic market. Generally, the export of
iron ore from
Ukraine in April 2006 was characterized by slow upward tendencies, however it has been done in expense of supplies to the domestic market, where the delivery volumes have been decreased in the first quarter of 2006.
In general, the world market for
iron ore gives good perspectives for increase in
iron ore exports from
Ukraine. Another factor, favoring the exports of
iron ore from
Ukraine is the industrial boom in
India.
India was, until recently, the biggest supplier of
iron ore in the world market. However, now the country uses most of its
iron ore domestically, forcing the importers of
iron ore to search for the other suppliers. In this condition, more and more attractive becomes the suppliers from South
Africa,
China,
Russia,
Kazakhstan and especially
Ukraine, where the domestic steel
production decreasing due to high prices of energy and other problems of the domestic metallurgical industry.