Roman Perepelytsia, head of strategy and business development at Metinvest Holding, started his presentation at the SteelOrbis 2024 Spring Conference & 90th IREPAS Meeting held in Berlin on April 28-30, by stating that Ukraine’s GDP growth is recovering moderately after seeing negative growth of 28.8 percent in 2022 because of the war. The GDP growth forecast for the country stands at 3.0 percent for 2024, 5.3 percent for 2025 and 4.5 percent for 2026. He went on to say that unemployment is also decreasing because of the massive refugee outflow from the country.
Regarding Ukraine’s trade balance, Mr. Perepelytsia said that the country’s trade balance remains consistently negative despite the partial deblocking of seaports. He went on to explain that the structure of trade has shifted towards agriculture, which now represents almost two thirds of Ukrainian exports, while the structure of imports has showed almost no change. Imports have been increasing to pre-war levels, while exports are far below the pre-war levels, he noted.
Looking at the steel industry, the Metinvest official indicated that steel production in Ukraine continues to recover gradually, but pre-war levels are unlikely to be achieved in the foreseeable future. In March this year, Ukraine’s crude steel production increased by 16 percent year on year, and rose by 37 percent year on year in the first quarter. Pig iron production increased by 16 percent and 32 percent, both year on year, in the respective periods. Perepelytsia underlined that Ukrainian steelmaking plants are working at reduced capacities, varying between 30 percent and 90 percent depending on the region. Meanwhile, some plants have shut down due to war-related damage. Since more than one third of the pre-war capacity of Ukrainian metallurgy is under occupation, there are some products that are not being produced in Ukraine right now such as plate, large-size sections, rails and rail fasteners.
On the other hand, domestic steel consumption is increasing actively, approaching pre-war levels. Mr. Perepelytsia said that, currently, steel consumption has reached approximately 80 percent of pre-war levels, indicating a recovery in both flat and long product segments. The share of imports in consumption has reached 25-30 percent, compared to less than 20 percent before the war. The increase in imports mainly covers the products that were previously supplied by plants in Mariupol (currently occupied), namely plate and hot rolled coils, the Metinvest official noted. Meanwhile, export volumes are three times lower than pre-war levels. He pointed out that the partial unblocking of seaports has boosted exports in recent months, with Europe remaining the largest destination for Ukrainian exports, while there has been an increase in exports to North America and the MENA region as well.