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Ukraine loses $420 million a month due to its inability to export metal via seaports: a study

Exports of metal from Ukraine: how much do we lose monthly in 2022? Photo: gmk.center

Exports of metal from Ukraine: how much do we lose monthly in 2022? Photo: gmk.center

Due to blocked seaports and stopped exports, Ukraine’s metal industry is estimated to lose around $420 million a month. Today, Ukrainian exporters from the metal industry are able to ship their products via Danube ports, but their capacities are limited. Another option is redirecting cargo to the EU ports, which increases the costs and time of transportation significantly. This was found in a recent study by the GMK Center.

Quote"Blocked seaports lead to significant export losses in the iron & steel industry of Ukraine. According to our estimations, the monthly value of such losses reaches $420 mln. Monthly, Ukraine could not produce and export 1.3 mln tons of iron ore, 151,000 tons of pig iron, 192,000 tons of semi-finished products, and 218,000 tons of finished steel products," the study says.

This situation forces the exporters to redirect their cargo to European seaports. As a result, the average distance to the dispatch port for Ukrainian exporters has increased fivefold. Consequently, the shipping costs also increase by 3–4 times.

Moreover, EU seaports currently don't have free capacities to handle Ukrainian products, GMK adds. As a result, railcars stay in queues at Ukraine-EU borders.

Quote"Even during the war, 60% of iron & steel products from Ukraine are shipped to end customers by sea. So rising output and utilization of Ukrainian iron & steel companies, restart idled facilities, growth of exports are possible only with unblocking of Ukrainian Black Sea seaports," the study concludes.

Context. After February 24, 2022, the iron & steel exports from Ukraine shrank significantly. Besides the blocking of seaports, it was caused by logistical problems and the destruction of large metallurgical plants such as Azovstal by the Russians. Thus, the exports of ferrous metals by our country’s metallurgical companies declined by 65.5% in the first nine months of this year as compared to the same period last year. In monetary terms, the exports decreased by 61.6% during this period, having amounted to $3.97 billion.

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