Prospects for Ukrainian metallurgical production for 2019

According to forecasts, steel production in Ukraine will grow by 12.7% to 23.8 million tons. This is an ambitious task for the country's mining and metallurgical complex, for comparison, in 2018, steel production increased by 0.5%. The achievement of these results largely depends on the effective work of Ukrzaliznytsia. Since April 1, Ukrzaliznytsya has increased tariffs for the carriage of goods by rail by 14.2%.

The main risks for Ukrainian metallurgists this year?

The main internal and external risks for metallurgists remain the protectionist policy of other countries, the increase in production costs due to the growth of tariffs of state monopolies, the outflow of workers abroad, the closure of some sales markets for Ukrainian metallurgical products, the provision of raw materials to enterprises and the export of finished products.

The conjuncture of external markets remains extremely unstable. The fact is that in all countries that have their own developed metallurgy, at least half of the supplies go to the domestic market. Therefore, when the price falls on world markets, they always have the opportunity to reorient themselves to their own home market. For this, protective measures are introduced, imports are limited and the vacuum that is formed is filled with metal products of a domestic manufacturer. We do not have such an opportunity, since our domestic market occupies less than 20% of the metal products produced by domestic enterprises.

The likelihood of an increase in the consumption of Ukrainian metal products within the country exists, but its implementation requires deliberate efforts both from the real sector of the economy and from the state. Today Ukrainian metallurgists, more than ever, need the development of the domestic market most of all.

Domestic Consumption Growth Outlook

In 2018, the domestic market grew by 6.4%. It grew by about the same amount in 2017, as compensation for the big drop that took place in 2014-2015 is underway. However, the import of metal products is growing even faster: if in 2017 its share in the Ukrainian market was 25.8%, then a year later it is already 27%.

The situation is understandable when products are imported that our factories do not produce, for example, automotive thin sheet or textured transformer steel. But the import of construction products is growing in the country, i.e. what our enterprises produce. In addition, the current situation is aggravated by an increase in unscrupulous imports, in particular, from the side of metal producers in China and Russia.

Therefore, in September, an investigation was launched into a galvanized sheet of Russian and Chinese origin.

What can increase the volume of domestic consumption

Market growth primarily depends on the development of infrastructure and to a large extent