Ukraine’s semis exports drop 72% due to war: will grain deal be extended to steel?

Thursday, 19 January 2023 17:18:56 (GMT+3)   |   Istanbul
       

In 2022, the Ukrainian steel industry and exports were hit hard by the Russian invasion, which led to the destruction of almost 40 percent of Ukrainian steel capacities and hit export transportation hard due to port blockades. According to customs information, carbon semi-finished steel exports totaled 1.9 million mt in 2022, down by an unprecedented 72 percent compared to 2021. Last year, semis exports came to 6.8 million mt, slipping by 9.5 percent year on year.

The major destinations for ex-Ukraine semis exports were Bulgaria, Poland and Italy as mills had only the possibility to export by rail to European countries. Blockades of ports by Russian troops impacted the export volumes the most. If steel production could be added to the deal reached for grain, it could allow mills to increase shipments sharply and to return to distant markets with higher volumes.  

The Ukrainian authorities are looking for opportunities to enlarge exports of grain within the scope of the grain deal, which was signed in July 2021 between Turkey, Ukraine, Russia and the UN, and opened three ports for grain exports. “It is essential for us to add more ports, to enlarge export volumes,” the first deputy prime minister of economy Julia Sviridenko said at the World Economic Forum in Davos.   

“We will focus on building more storage for agricultural goods, but what we need to do from a strategic point of view is to open sea ports. It’s not just about agriculture, it’s about steel,” she added.   

As Ukraine’s GDP fell by 30.2 percent in 2022 due to the war started by Russia, the major target for 2023 is to support the economy and to reach the growth rate of three percent for GDP this year. Expanding exports by sea ports is a necessity for this, the minister stated.


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