Ukraine daily steel output plunged 6% mom in February

Crude steel production in Ukraine decreased 13% mom to 2.64 mmt in February (-6% mom on a per-day basis), and was 5% lower compared to the industry’s preliminary aggregate plans for the month. In 2M12, steel production slid 5% yoy to 5.28 mmt.

Roman Topolyuk: While a calm steel product market is usual for late winter, this February’s steel stats were worse than expected. The lack of buyers was exacerbated by logistics issues as sea ports froze. As around 80% of Ukraine’s steel products are exported, some downward pressure might be put on the UAH/USD exchange rate in the short-term (up to one month) as a result. As for the market outlook, Ukrainian steel producers are trying to negotiate 2-3% higher prices for steel products to be manufactured in April, though some traders are concerned that a traditional market spike in spring this year would not be supported by actual demand, thus causing the prices to fall back. We believe the current market environment signals a threat to steel exports from Ukraine in the coming months.