Ukrainian iron ore miners operating at around 50% utilization rate: GMK

Iron ore miners in Ukraine are operating at well below full capacity, according to Kyiv-based industry analysts GMK Center, adding that although most plants are still running, their utilization rate is only around 50%.

In a statement March 11, GMT added that miners in the country can only ship their products by rail at present, which means trade is limited to Europe, with all of Ukraine's sea ports currently blocked.

GMK analysts said that all Ukrainian steelworks have now been put into standby mode, while Russian mills are facing disruptions to seaborne and airborne logistics, with sales volumes well down on the levels prior to Russia's invasion of Ukraine.

Last year, Ukraine and Russia together met 84% of the EU's demand for semi-finished steel, with Ukraine alone providing 34% of slab and 50% of billet rerolled in Europe, GMK said.

In addition, Ukraine usually sells up to 46% of its iron ore in Europe.

In 2021, 19% and 18% of iron ore pellet imports into the EU and China, respectively, came from Ukraine. While the country's pellet shipments to Europe are continuing, pellet deliveries to China have been disrupted, GMT said.

Eight out of ten Ukrainian iron ore mining and beneficiating plants are located in or around Kryvyi Rih in Dnipropetrovsk region, while the Poltava and Zaporizhia regions have a single miner each.

Maintaining iron ore mining is important for Ukraine, with the industry providing some 54,000 jobs and 10% of the country's export revenue, according to GMK.

Meanwhile, Moscow investment bank Renaissance Capital said in a report March 11 that aside from the steel industry, the global energy, construction and automotive sectors appear to be those most exposed to CIS metals and mining supply issues.

Renaissance Capital metals and mining analyst Boris Sinitsyn said that coal and enriched uranium account for 36% of the total value of the Russia's mining and metals' exports, making the global energy sector the most exposed to Russian hard commodities exports.

Analyzing only ex-energy supplies, the construction and car industries' purchases represent respectively 27% and 13% of the total value of Russian exports, calculated in dollars at spot commodity prices, Sinitsyn added.