Ukraine’s Steel Industry Will Only Recover Once Seaports Are Unblocked To Enable Exports

“Therefore, the group calls on the authorities, diplomats, and international partners of Ukraine to make every effort to open the sea to Ukrainian steel,” he says in an interview with Forbes. “The group speaks on behalf of the entire industry.” This will produce about $600 million in export revenue each month and preserve hundreds of thousands of jobs, which will increase the state’s economic power.

If Ukraine is successful in opening the ports for the export of mining and steel products in addition to the current grain export corridor, Nikolayenko adds, the country’s steel industry has the potential to rapidly recover.

He claims that due to Russian occupation, both of Metinvest Group’s Mariupol businesses, Azovstal and Ilyich Steelworks, which accounted for about 40% of Ukrainian steel output, have been destroyed and eliminated from the country’s economy.

Ukrainian steel producers decreased their annual basic steel output in 2022 by 70.7% to 6.26 million tonnes.

According to Nikolayenko, “one of the main causes for this drop in production can be found in problems with sales due to blocked seaborne exports.” “Steelmakers were exporting 80% of Ukraine’s steel before the full-scale conflict. Approximately 70% of Ukraine’s steel products were previously exported through seaports, but since a full-fledged conflict has broken out, the ports are still closed to all but agricultural exporters.

Steelmakers are utilizing the capacity of railroads and river ports while searching for alternative means of exporting their goods.The cost of logistics has increased four to six times, according to the Metinvest representative, as a result of substantial increases in railroad tariffs (up to 140% for ore, coal, and coke and up to 70% for ferrous metals).

The Ukrainian government stated in January that it was looking to expand the agreement on the grain export corridor to cover other products, particularly steel.