CHALLENGES & OPPORTUNITIES
Association Chronology The Ukrainian Association of Ferrous Metallurgy Enterprises was founded by decision of 28 National Metallurgical entities The Association of Enterprises METALURGPROM was established according to the Decree of the President of Ukraine The amalgamation of both entities into the Association of Enterprises Association became an Affiliated Member of the World Steel Association 1995 1998 2016 15 3 8 4 STEELMAKING COMPANIES IRON ORE MINING&PROCESSING FACTORIES R&D AND EDUCATIONAL INSTITUTIONS COMMERCIAL COMPANIES MEMBERS OF ASSOCIATION 1
Advantages of Ukraine as of a Steelmaking Country Advantageous Geographical Placement Significant Raw-Materials Base Developed Transport Infrastructure High Concentration of Industry World Level Quality of Products Qualified Personnel Significant Scientific and Educational Base 2
Location of Steel-Making Plants in Ukraine CHERKASY POLTAVA KHARKIV KROPYVNYTSKYI MYKOLAIV EVRAZ DMZ ArcelorMittal Krivyi Rih Dniprovsk MP DNIRPO DSS Zaporizhstal ZAPORIZHZHIA Enakievo MP Donetsk-steel DONETSK DMWP Azovstal LUHANSK Alchevsk MP DEMP MMP Illyich KHERSON Plants within the controllable territory of Ukraine Plants beyond the controllable territory of Ukraine SIMFEROPOL 3
Share of Ferrous Metallurgy in the Ukrainian Industrial Complex in 2016 18% STEEL MAKING FERROUS METALLURGY 300 000 employees 9% other Ukrainian Industries 75% 5% IRON ORE PRODUCTION 2% COKE PRODUCTION 91% Other Ukrainian Industries 3 000 000 employees 25% PRODUCTION 9% MANPOWER 4
Main Metallurgical Production Facilities in Ukraine (2017) 21 7 Work Timeout 15 6 7 8 12 6 8 1 Blast Furnaces Open Hearth Furnaces Basic Oxygen Furnaces Electric Arc Furnaces Concast Machines (49% of total casting) Changes in Steel Production Facilities by Processes for 10 years Crude Steel Production by Processes in 2016 (Mio MT & %) 48% 4% 8% Electric Arc Steel 1,45 6% 69% 48% 23% 2007 2017 Basic Oxygen Steel 17,91 74% 24,2 100% Open Hearth Steel 4,84 20% OHF Steel BOS EA Steel 5
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F Dynamics of the Crude Steel Production in Ukraine (Mio MT) 42 The main reason of the significant reduce of the steel production in 2017 (forecast) is a military confrontation in Donbass with the loss of some steelmaking facilities and the necessity to partially diversify export markets 33 24 22 22 26 24 27 32 33 34 37 37 39 41 43 37 30 33 35 33 33 27 23 24 21 6
UKRAINIAN STEEL PRODUCTS: Production & Consuming ( 000 MT, 7 months 2017) STEEL PRODUCTS IN UKRAINE: Export & Import ( 000 MT, 7 months 2017) 12 654 EXPORT 10 618 2 800 (26.4%) 8 477-2 141 (-20.1%) 10 195-2 459 (-19.4%) 2 985 (28.1%) 2 091 (24.6%) 2 925 (34.6%) Long Product Flat Product EXPORT 4 833 (45.5%) 3 461 (40.8%) Semiproducts 10 618 (84%) 7 months 2016 7 months 2017 EXPORT 8 477 (83%) IMPORT 584,6 198.6 (34%) 685 267.9 (39.1%) Long Product DOMESTIC MARKET 2 036 (16%) 7 months 2016 7 months 2017 DOMESTIC MARKET 1 718 (17%) 9.8 (1.7%) 376.2 (64.3%) 7 months 2016 410.7 (60%) 7 months 2017 Flat Product Semiproducts 6.4 (0.9%) 7
Geography of the Ukrainian Steel Products Export in 2015/2016 ( 000 MT) EU-28 Egypt Middle East Turkey Russia Africa Europe NAFTA Latin America CIS India Asia 70 117 93 123 104 17 262 195 264 149 575 764 1 076 1 442 1 296 1 544 2 186 2 495 2 529 2 501 2 715 2 887 5 320 6 102 2015: 17,14 Mio MT 2016: 17,69 Mio MT 8
Geography of Ferrous Metallurgy Goods Import in 2015/2016 ( 000 MT) EU-28 84 486 Russia 340 392 Turkey Egypt India 3 19 24 20 12 238 China 2 116 2015: 809 800 MT 2016: 927 000 MT 9
The average level of capital investments per ton of crude steel in Ukraine for last 10 years is about USD 27 per ton Dynamics of Capital Investments into the Ukrainian Ferrous Metallurgy UAH Bio. USD Bio Capital Investments per Ton of Crude Steel in Ukraine $/MT 12 2,5 50 10 8 6 4 10,5 8,6 5,0 4,5 6,4 6,3 6,2 6,4 8,3 9,7 2,0 1,5 1,0 40 30 20 27 2 0,5 10 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0,0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 The Adverse Investment Climate and Difficulties to Gain Foreign Investments Impede the Active Modernization of the Industry 10
Crude Steel Production Forecast in Ukraine 2017-2026 (Mio MT) The forecast is made taking into consideration the predictable activity of steelmaking facilities within the controllable territory of Ukraine 21 21,5 22 22,5 23 23,5 24 24,5 25 25,5 30 25 20 15 10 5 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0 11
Export and Domestic Finished Steel Products Deliveries Forecast 2017-2026 (Mio MT) 19 19.5 20 20.4 Export Domestic 20.9 21.4 21.8 22.3 22.7 3,2 4 4,7 5,1 5,6 6,1 6,5 7 7,4 7,9 23.2 15,8 15,5 15,3 15,3 15,3 15,3 15,3 15,3 15,3 15,3 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 The Ukrainian steel product export will reduce from 15.8 Mio MT to 15.3 Mio MT per year and starting since 2019 won t be increased anymore due to stabilization of exporting markets. At the same time the significant increasing of deliveries to the domestic market with a rate of 0.4 0.5 Mio MT per year is expected. 12
GOALS & ACTIVITIES MAIN GOAL To Provide the Comfortable and Favorable Conditions for the Most Efficient Activity and the Stable Advancement of the Ukrainian Ferrous Metallurgy The Trade Policy of the Industry and the Country The Raw Materials and Logistical Provision The Production, Technical, Technological and Energy Efficiency The Fiscal Policy The Strategic Development of the Industry The Technical Regulation and Metrology The Industrial and Environmental Safety 13
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