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ArcelorMittal, Metinvest contribute most to Ukraine’s steel output growth in 2010

Wednesday, 26 January 2011 16:37:37 (GMT+3)   |  
       

In 2010, Ukrainian crude steel output amounted to 32.7 million mt, registering a 10 percent year-on-year increase, while world crude steel production went up by 15 percent and Russian and Turkish steel companies saw aggregate crude steel growths of 11.7 percent and 14.6 percent year on year respectively. At the same time, demand for Ukrainian steel products in the export markets remained strong throughout 2010.
 
The 2010 performance was mainly driven by the increased production of Ukraine's largest mills, ArcelorMittal Kriviy Rih and Metinvest's mills Azovstal and Ilyich Iron and Steel Works, which expanded their crude steel outputs by 21.7 percent, 22.8 percent and 32 percent year on year respectively. Meanwhile, the worst top-tier performers in 2010 were Industrial Union of Donbass' (ISD) subsidiaries Alchevsk Iron and Steel Works (Alchevsk) and Dneprovsky Iron and Steel Works named after F. Dzerzhinsky (DMKD), showing 20.4 percent and 19.7 percent output declines respectively due to lack of working capital.   

Producer

2010 (million mt)

Change y-o-y

ArcelorMittal Kriviy Rih

6.133

+21.7%

Azovstal

5.702

+22.8%

Ilyich

5.652

+32%

Zaporizhstal

3.451

+5%

Yenakievo

2.497

+4.7%

Alchevsk

2.895

-20.4%

DMKD

2.769

-19.7%

 
Ukraine's crude steel to increase by 14.5 percent in 2011
 
According to Eugen Dubogryz, analyst with BG Capital, the expected near-time resolution of working capital setbacks and continued world steel demand growth in 2011 are expected to lead to a crude steel production increase of 14.5 percent year on year in Ukraine in 2011, to 37.4 million mt.
 
At the same time, analysts have noted that the key risks for Ukraine's steel industry in 2011 are higher prices for raw materials, primarily for iron ore, the shortage of coking coal in the domestic market with a sharp rise in coal prices earlier this year, as well as the possible introduction of restrictions on Ukrainian steel exports to the European market.

Steelmakers to resume large-scale investment projects in 2011

In addition, in 2011, analysts expect the resumption of large-scale investment projects by the major players in the Ukrainian domestic steel market. According to BG Capital, total investments in Ukraine's metals and mining sector in 2011 will amount about $1.5 billion, up from $500 million in 2010. The major investment programs, the completions of which are planned for 2011, are the following: 

Company

Project

Expected completion

Zaporizhstal

Completion of pulverized coal injection (PCI) plant construction

H2 2011

ArcelorMittal Kriviy Rih

Construction of continuous billet caster (1.2 million mt capacity)

Late 2011

DMKD

Completion of continuous billet caster No. 3 construction (1.7 million mt capacity)

H1 2011

Interpipe

Construction of new electric steelmaking plant (1.32 million mt capacity)

Late 2011


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