Ukraine's steel production has remained strongly affected by the ongoing Russian hostilities in the country. Specifically, according to the preliminary data disclosed by Ukrmetallurgprom, in the January-July period of the current year Ukraine's steel output totaled 4.82 million mt, declining by 62.1 percent year on year, while its pig iron output amounted to 4.815 million mt, down 61.9 percent year on year. Meanwhile, in the given period Ukraine-based steel mills produced 4.229 million mt of finished steel, down 61.7 percent year on year.
As SteelOrbis reported earlier, due to the Russian invasion Ukraine has lost about 30-40 percent of its steelmaking capacity as the Mariupol-based steel plants represented more than a third of Ukraine's steel production. Specifically, the crude steel output of Azovstal was 4.34 million mt in 2021, while Ilyich Iron and Steel Works produced 4.26 million mt in the same year. On February 24 this year, the operations at Mariupol-based Azovstal and Ilyich Iron and Steel Works, owned by Metinvest Group, were suspended and put into preservation mode. Subsequently, with Azovstal having been seriously damaged by Russian military action as it was part of a key battleground in Ukraine, Metinvest announced its intention to build a new modern plant in the future on the mill’s premises.
Besides the impact from the ongoing war, Ukraine's steel production has been affected by the deterioration of the situation in the global steel market, in particular in July. Specifically, by July the support from high global prices, which were caused by disruptions in global supply chains, has dwindled to almost nothing and the positions of Ukrainian steel mills have become more challenging. In particular, Ukrainian steel mills have been forced to handle logistical constraints, coupled with higher logistics-related expenses.