Scenarios on hot dipped galvanized market in Ukraine

Scenarios on hot dipped galvanized market in Ukraine

Market reports from Ukraine point to a recent development for the supply of galvanized material. It is already acknowledged that the supply of this product in the domestic market falls behind the actual demand. Seeing this fact, the Ukrainian metals trading company UGMK is reported to have imported a certain quantity into the country from the Hungarian source Dunaferr. The producer Dunaferr was acquired by the Donbass-Duferco consortium by end last year. This cargo, brought for trial purposes has found great interest from the market, according to information from SteelOrbis correspondent. The company states that the Hungarian material is of higher quality and therefore is relatively high-cost, compared to the other sources. The price difference is referred to as around 5-7%. According to reports, the price of Dunaferr galvanized material is around Hryvnia 6'250-6'350/mt (around $1'180-1'195/mt) for 0.5-0.7 mm thickness, and around Hryvnia 6'180/mt ($1'163/mt) for 1.4-1.5 mm coil. For sheets, the prices range between Hryvnia 6'430- 6'450/mt, again depending on thickness. Current price level for 0.55-1 mm galvanized material is in the range of Hryvnia 5'550-5'590/mt, including VAT on ex-works basis. Experts state that the Hungarian material may become very much in demand in Ukraine in the future once it has entered the market now, despite the higher costs. On the other hand, there are of course suppliers from other origins such as Kazakhstan, Slovakia and Russia. Also Illych is a local producer of the galvanized material. The argument of the opponents is basically that galvanized products from the above cited origins can also easily meet more or less the same quality requirements. However, those that have special requirements might still be going for the Hungarian material in Ukraine, some state. The consumption of zinc-coated steel is predicted to grow in the coming year, in line with the new industrial construction projects. UGMK appears to have plans to bring in an additional cargo of Dunaferr material to Ukraine in January and is quite confident that it will be in a position to import at least 2'000 mts of galvanized steel per month.