Ukraine’s Iron Ore Exports to Decline by 15% in 2025

SEATTLE (Scrap Monster): In 2025, Ukraine’s iron ore exports may decline by 15% – to 27 million tonnes. This is stated in GMK Center’s article ‘Prospects for the Ukrainian steel industry in 2025’.

Low ore prices and rising production costs are among the main reasons for the projected decline. In 2024, the price of iron ore at $95 per tonne was already making exports to China unprofitable. High dollar inflation in Ukraine and rising electricity costs, which account for up to 50% of production costs, further complicate the situation.

Producers face a significant financial burden. For example, one of the leading companies reported an 11% increase in its cost of production in dollars in the first half of 2024. Electricity prices and transport problems continue to weigh on the industry.

Transport challenges also remain relevant. Although the end of hostilities could help to reduce shipping costs, a quick effect is not expected. A limited number of vessels, high insurance premiums and risks in the Black Sea remain significant barriers to logistics.

The expected increase in railway tariffs also raises questions about the industry’s future operations and competitiveness. In particular, on 9 December, Ukrainian Railways approved a 37% increase in tariffs, or approximately 13% year-on-year. As a result, the logistics component of the cost of cargo will increase by around 2.7% for iron ore.

According to analysts, the best hope for stabilising exports is linked to the end of the war. However, even with optimistic developments, costs will remain high and competition will remain fierce. The situation on the global iron ore market dictates its own conditions: Ukrainian exporters are forced to adapt to low margins and look for new ways to optimise.

In 2023, Ukraine reduced iron ore exports by 26% compared to 2022, to 17.75 million tonnes. Exports of raw materials decreased by 60% compared to pre-war 2021. Revenue of Ukrainian iron and steel companies from iron ore exports decreased by 39.4% y/y – to $1.77 billion.

The main producers of iron ore in Ukraine are Ingulets Mining, Kryvyi Rih Iron Ore Enrichment Plant, Poltava Mining, Yeristovo Mining, Northern Mining, Central Mining, Southern Mining, ArcelorMittal Kryvyi Rih, Sukha Balka, and Rudomine.

 Courtesy: www.gmk.center