A number of problems facing the development of the Ukrainian metallurgical and iron ore industries were discussed during the Ukrainian Congress of Metallurgists and Iron Ore Producers which took place in Dnepropetrovsk on March 4.
The main topics of discussion included the rising production costs caused by the increasing cost of materials, of freight and energy resources, and also included the decreasing share and declining competitiveness of Ukrainian steel products in the international market.
In his speech, the head of the Ukrainian Metallurgists Federation Mr. Vasiliy Kharakhulakh outlined the main industry results for 2007, the perspectives for 2008, and also emphasized several factors negatively affecting the development of the Ukrainian steel industry. The latter, according to Mr. Kharakhulakh, include the rising cost of raw materials and energy resources, the deterioration of the main production facilities, rising railways tariffs, scarcity of railways cars, and problems with VAT reimbursement. Mr. Kharakhulakh added that the Ukrainian steel industry needs to improve its level of competitive ability via the reduction of energy use, increasing the quality of manufactured products and expanding its product range. However, he said that this would be impossible without the modernization of the main production processes and without the support of the government.
Meanwhile, the country's Minister of Industrial Policy Mr. Novinksy emphasized that, although Ukraine has upped its steel exports every year, the share of the international market occupied by the Ukrainian producers is decreasing. This is happening because Ukraine does not introduce new production capacities, he said.
On the other hand, Deputy Minister of Economy Mr. Victor Panteleenko identified a decrease in steel production in Ukraine in January 2008. However, Mr. Panteleenko expressed a positive view regarding the country's entry to the WTO. "I believe that steel exports from Ukraine will increase by 25 percent following the country's WTO accession," he said.
Most of the participants at the congress expressed their worries regarding the increase in railways tariffs. However, Deputy General Director of Ukranizatsia Mr. Viktor Chernih stated that the increase in railways tariffs was provoked by the rise in prices for steel, especially for rails.