ECONOMIC
IMPACTof iron & steel
industryof Ukraine

2023

Economic impact of iron & steel industry of Ukraine 2023

gmk.center

WHY IS THE IRON & STEEL SECTOR OF UKRAINESO IMPORTANT
2. The responsible
1. The basic sector
employer thatfor the Ukrainian
creates qualified
economy, providing
jobs with highexports, investments
salaries.
and taxes.
The iron & steel sector contributed
5.7% to the GDP of Ukraine in2023, incl. supply chains. The
sector will support the Ukrainian
economy in 2024 thanks to theeffective operations of the “seacorridor”.
It will also increase exports. The
sector’s share in total exports was
14.6% in 2023.
The sector’s largest companies
continue to invest, having invested$600 mln and paid $1 bln in taxes
in 2023, representing 3.0% of all
tax revenues.

Iron & steel companies create
attractive working conditions boththrough high wages and improved
safety.
Wages in the steel industry are
37% higher than the average in
Ukraine in 2023.
Iron & steel sector provided morethan 560 thousand jobs, incl.
supply chains before the war. Theiron and steel sector remains amajor employer today, that will
provide regional employment anddeter people from migration.

4. The key supplier
3. The baseenabling
for post-war
the development
reconstructionof a low carbon
and strengthening
economy.
of defense capabilities.
The iron and steel sector will be
critical to rebuilding of damaged
infrastructure. In Ukraine, morethan 250 ths residential buildings,
3.8 ths buildings of educational
institutions, 1.3 ths health carebuildings were completelydestroyed as the result of the war.
It will create demand for millions
of tons of steel for recovery.
Also, the iron & steel industry is
critical for the development of themilitary industry, which is essential
for strengthening Ukraine’s
defense capability after the war.

Ukraine is well suited for thedevelopment of projects toproduce high quality iron ore for
DRI production
Ukraine has one of the largest
reserves globally of magnetiteores - 5 bln tons. It enables local
iron & steel companies to supply
20-25 mln tons of DR-feed to
global market, covering up to
14% of new demand till 2030,
according to announced projects.
Ukraine will help the global
industry in its green transition inthis way.
2Economic impact of iron & steel industry of Ukraine 2023

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THE MOST SUFFERED
FROM THE WAR
PRE-WAR

ANNEXATION OF CRIMEAAND OCCUPATION
OF DONETSK AND
LUHANSK REGIONS

FULL-SCALEINVASION

2013

2018*

2023

Number ofsteelmaking plants

1296

Nominal crude
steelmaking
capacities, mln tons

42.0

27.0

17.8

Crude steel output,
mln tons

32.7

21.1

6.2

* after the loss of control over steelmaking assets in Donetsk and Luhansk regions

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Economic impact of iron & steel industry of Ukraine 2023

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RESILIENT INDUSTRY
Iron & steel output in Ukraine, ths tons
84,431
31,411IRON ORE 28,823

2021

21,366

CRUDE
6,263
STEEL

MERCHANTPIG IRON

6,228

7,980
FLATS

2,179
2,055

LONGS

3,800
1,350
1,764

TUBES

3,236
1,325
1,249

1,123
632
695

2022

2023

859
540
FERROALLOYS 230

SCRAP
COLLECTION

4,100
997
1,277

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Economic impact of iron & steel industry of Ukraine 2023

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ECONOMY BASE

5.7%
Contributed by iron& steel industry andsupply chain to GDPof Ukraine in 2023

Iron & steel sector of Ukraine is one of the hardest hit
by the war. But nevertheless, the sector remains basic
for the Ukrainian economy, contributed 5.7% to the GDPin 2023. Before the war, the contribution of the iron &steel industry to Ukraine’s GDP was 10.3%.
We could expect that in 2024, the iron & steel sector
to support the Ukrainian economy as Black Sea ports
reopen. The iron & steel sector will remain key to theeconomy in the future, as it forms the basis for postwar recovery and the green transition.

5Economic impact of iron & steel industry of Ukraine 2023

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GLOBAL PLAYER

14.6%

Contributed by iron& steel industry andsupply chain to exportof goods from Ukraine
in 2023

Iron & steel sector of Ukraine provided every third
dollar of goods exported from Ukraine before
the war. Last year it provided about 15% of totalexports.
Pre-war iron & steel sector was an importantpart of the global steel supply chain, ranking 2nd
among the largest suppliers of pig iron, 3rd in the
supply of semi-finished steel products, and 4th
in the seaborne supply of iron ore. Ukraine will
gradually restore its leadership positions, that will
be facilitated by the opening of the “sea corridor”,
and then by the end of the war.

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Economic impact of iron & steel industry of Ukraine 2023

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LARGE INVESTOR$600 mln
Capital expenditures ofthe largest iron & steel
companies of Ukraine
in 2023

The iron & steel sector provided every third dollar of
total capital investment in Ukrainian industry in 2021.
In 2023, capital investments by the largest companies
in the sector was 17% less year-on-year and 73% below
2021. It corresponds to the dynamics of the main
products output. In other words, CAPEX per ton of steel
is close to 2021 level.
The progressive escalation in Ukraine is preventing therestoration of investment activity. Most companies
have frozen large investment development projects.
But they will be resumed as soon as the war is over,and the iron and steel sector will be the driver ofindustrial investment.

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KEY EMPLOYER+37%

Salaries in iron &steel sector arehigher than averagein Ukraine in 2023

Before the war, the sector provided jobs for every 13th
worker in Ukraine, or more than 560,000 people, incl,
supply chains.
Companies in the Ukrainian iron & steel sector are
responsible employers and strive to retain staff.
The number of staff of the largest companies in thesector decreased in 2023 by 32%, compared with
2021, although the output of the main products
decreased by 71%.
Salaries in the sector are 37% higher than the averagein Ukraine. Steel companies strive to create attractive
working conditions also through investments in safety.

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RESPONSIBLE TAXPAYER

Companies in the iron & steel sector pay
taxes responsibly, supporting state and local
budgets during the difficult period of the war.
The share of the sector in the total amountof tax payments in Ukraine remainedat the pre-war level at 3.0%.

$1 blnTaxes paid by thelargest companiesof iron & steel sectorof Ukraine in 2023

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Economic impact of iron & steel industry of Ukraine 2023

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RESPONSIBLE “CITIZEN”
OF UKRAINE
About 10-15% of steel company personnel serve in
the armed forces defending Ukraine. Companies
in the iron & steel sector can`t stand aside andtake an active position in supporting the army
and civilians. Steel companies organize medical
and psychological assistance to the affected andimplement programs for the rehabilitation andemployment of veterans.

$100 mln
Support for thedefenders of Ukraine
and humanitarianassistance to the warvictims by iron & steel
sector of Ukraine
in 2023

10Economic impact of iron & steel industry of Ukraine 2023

20-25
mln tons

potential merchantsupply of DR-grade
feed from Ukraine
in mid-term

gmk.center

KEY SUPPLIER
OF DR-GRADE FEEDIN THE FUTURE
Potential of DR-grade feed capacities in Ukraine,
mln tons
COMPANYPRODUCTCAPACITY

Metinvest

Pellets

7.5

Metinvest

Concentrate
68-70%

19.3

Ferrexpo

Pellets

3.0-5.0

ArcelorMittal
Kryvyi Rih

Pellets

5.0Black Iron

Concentrate
68%

4.0-8.0

Southern GOK

Concentrate
68%

3.0
Data source: GMK Center vision

11Economic impact of iron & steel industry of Ukraine 2023

6 mln tons

Potential supply oflow carbon steel
from Ukraine till
2035, according toGMK Center`s vision

gmk.center

ESSENTIAL PARTOF NEW LOWCARBON ECONOMY
Potential routes for decarbonizationof iron & steel sector of Ukraine
COMPANYPRODUCTMetinvest

2 DRI modules × 2.5 mln tons

Zaporizhstal

2 EAFsKametsteel

EAF + slab casting,+ bloom casting

ArcelorMittal Kryvyi Rih

DRI-EAF facilities

Data source: companies data, GMK Center vision

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WHAT DOES THE IRON & STEEL SECTOR OF UKRAINELOOK LIKE TODAYIRON & STEEL

6

Steelmaking
plantsDniproMetallurgical Plant

CokePig iron

Crude steel

FlatsLongs

Stainless SteelSemis

Welded pipes

Alchevsk Iron and Steel Works

Dniprospetsstal

17.8
mln tons
Steelmaking capacities
as of December 2023

Interpipe Steel

Yenakieve Iron
and Steel Works

Kamet SteelDonetsksteel,metallurgical plant

Zaporizhstal Iron
and Steel Works
Kryvyi Rih
ArcelorMittal Kryvyi Rih

Kurakhove

Donetsk

Elektrostal
Azovstal Ironand Steel Works

Destroyed or occupied
ukrainian enterprises

Ilyich Iron andSteel Works
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Economic impact of iron & steel industry of Ukraine 2023

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WHAT DOES THE IRON & STEEL SECTOR OF UKRAINELOOK LIKE TODAYROLLING MILLS& TUBES

Flats

Longs

Weldedpipes

Seamless
pipes

Seamlessstainlesspipes

Korosten

Trubostal Pipe Plant

DMZ Kominmet
Khartsyzk
Pipe Plant

Dnipropetrovsk Pipe Plant
Interpipe NTRP
Makiyivka
Metallurgical Plant
Centravis

KamianetsPodilskyi

Interpipe
NIKO TUBE

Module-Ukraine

Pervomais’kMetipol
Destroyed or occupiedukrainian enterprises

Interpipe
Novomoskovs’k
Pipe Plant

Unisteel
Donetsk

Kryvyi Rih

Donetsk
Metallurgical Plant
Donetsk Metal
Rolling Plant
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Economic impact of iron & steel industry of Ukraine 2023

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WHAT DOES THE IRON & STEEL SECTOR OF UKRAINELOOK LIKE TODAYIRON ORE
Pellets

10

Iron ore mining andprocessing plants

5 bln tons
magnetite ore
reserves

Iron ore

Sinter ore

Concentrate

Destroyed or occupied
ukrainian enterprises

ArcelorMittal Kryvyi Rih
RudomainCentral GOK (Mining andProcessing Plant)
Ingulets GOK (Mining andProcessing Plant)Kryvyi Rih Iron Ore Plant

Ferrexpo Poltava
MiningNorthern GOK (Mining andProcessing Plant)

Ferrexpo Yeristovo
MiningSouthern GOK (Mining andProcessing Plant)
Sukha Balka GOK (Miningand Processing Plant)

Kryvyi Rih

Zaporizhzhia
Iron Ore Plant

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Economic impact of iron & steel industry of Ukraine 2023

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WHAT DOES THE IRON & STEEL SECTOR OF UKRAINELOOK LIKE TODAYFERROALLOYS
Ferroalloys

3Manganeseconcentrate

Destroyed or occupied
ukrainian enterprises

Ferroalloy plants
and 2 manganeseore mining plants

2.1bln tons
Manganese orereserves

Marganets GOK

Mn

StakhanovFerroalloy Plant
Nikopol Ferroalloy Plant
Kramatorsk
Ferroalloy Plant

Pobuzhskiy
Ferronickel Plant
Pokrov GOK

Mn

Zaporizhzhia
Ferroalloy Plant

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Economic impact of iron & steel industry of Ukraine 2023

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METHODOLOGY
The share of the iron & steel
sector in GDP, including supply
chains, includes direct, indirect
and induced contributions
from the following sectors:
metallurgical production, iron ore
mining, coke production, coking
coal mining, metal products
manufacturing.
Indirect contribution is theportion of the total contribution
created in other sectors throughthe consumption of iron & steel
sector. The induced contribution

is created through consumer
spending by workers of the iron &steel sector. The source of datafor indirect and induced input isthe input-output table, which is
published by the State Statistics
Service of Ukraine.
The contribution to employment
share and wages is calculated
similarly to GDP.
The contribution to GDP 2023 is
calculated based on the dynamics
of real output of the iron & steel
sector subsectors in 2021-2023,

the dynamics of real GDP in 20212023 and the share in GDP of theiron and steel sector in 2021, since
the input-output table was not
published in Ukraine in 2022-2023.
Capital investments, tax
payments, humanitarian aidof iron & steel companies are
based on the performance of thelargest companies of the sector,
which include: Metinvest Holding,
ArcelorMittal Kryvyi Rih, Interpipe,Ferrexpo, DCH Steel, Rudomain,
Kryvyi Rih Iron Ore Plant,

Southern Iron Ore Plant, Nikopol
Ferroalloy Plant, Zaporizhzhia
Ferroalloy Plant, Marganets
Mining and Processing Plant,
Pokrov Mining and ProcessingPlant.
The assessment of the possible
supply of DR-feed from Ukraine to
the global market is the opinion of
GMK Center, not agreed with thecompanies, based on announced
projects.
All information in this report isbased on publicly available data.
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Economic impact of iron & steel industry of Ukraine 2023

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