Ukraine’s August steel output down on low demand, Chinese competition

Ukrainian steelmakers cut their outputs in August on low demand from the Middle East and tough competition from China.

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The country’s total crude steel production fell by 13% year-on-year last month to 2.63 million tonnes, the country’s steelmakers’ union, Metallurgprom, said on Wednesday September 5.

Rolled steel output in August slipped by 10% year-on-year to 2.36 million tonnes.

But Metallurgprom reiterated its 2012 production forecast for Ukraine, which stands at 33.5 million tonnes of crude steel and 30 million tonnes of rolled products.

“We hope demand will pick up after the summer holidays are over, which will lead to higher monthly production volumes,” a Metallurgprom representative said.

Ukrainian steelmakers produced 22.01 million tonnes of crude steel and 19.68 million tonnes of rolled products in the first eight months of the year.

The output was down in August, as traders had not placed as many orders with producers as they did during the month of Ramadan last year, according to Evgeniy Dubogryz, head of research at CFS Advisors, a Ukrainian consulting firm.

“Traders normally order during the [Ramadan] fast, as they prepare to start actively selling right after,” Dubogryz said. “However, post-Ramadan demand expectations were low this year, and traders did not order as much.”

Another major factor behind the producers’ thinner order books for August material was competition from China. The country has been offering its steel at prices Ukrainians cannot match, Dubogryz said.