Annual steel production in Ukraine will make up 14.5 per cent in 2011

Annual steel production in Ukraine will make up 14.5 per cent in 2011. In 2011, Ukrainian metallurgical enterprises will increase steel smelting by 14.5 per cent against the indexes of 2010 to 37.4 million tons, according to the forecast of investment company BG Capital specialists. The sector growth rates this year will exceed the last year rates by 10 per cent, the company review says. Experts also expressed optimism as regards prices for metal products and metallurgical raw materials this year. The global macroeconomic situation that stably improves, reduction of steel export volumes from China, as well as deficit of the raw materials on the majority of markets allow waiting for the second wave of world's high demand for steel and, as a result, for a price growth. By estimates of BG Capital specialists, the average growth of export prices for Ukrainian metal products in 2011 will make up 12 per cent in annual terms, in particular, the average price of square billets will make up USD 574/tons, slabs - USD 570/ton, hot-rolled coils - USD 665/ton, UKRINFORM reports. The main reason of the sector's low growth rates in 2010 became lack of circulating capital with its separate representatives, the company specialists are convinced. By results of the previous year, Ukrainian metallurgical enterprises boosted steel smelting by 10 per cent with the world steel production growth at 15 per cent and an increase of steel smelting by Russian and Turkish enterprises by 11.7 per cent and 14.6 per cent respectively. At the same time, demand for Ukrainian metal products on the export markets remained high over the whole year. Results of activities of three largest national metallurgical plants, such as Arcelor Mittal Kryviy Rih, Azovstal and Illich Metallurgical Plant testify to that. Last year, they boosted steel production by 22-27% in annual terms, having substantially surpassed the sector as a whole by the growth dynamics. According to forecasts of analysts, demand for Ukrainian steel continues growing. Factors are as follows: an increase of demand for steel in the world (+5.3 per cent) and in the CIS countries (+12.1 per cent); increase of exports to South-East Asia; growing internal demand ahead of UEFA EURO 2012. By the company estimates, export of Ukrainian steel in 2011 will grow by 13.5 per cent in annual terms to 27.5 million tons, including at the expense of an increase of supply of semi-finished goods to South-East Asia by 18 per cent 3.84 million tons. In addition, BG Capital experts forecast a growth of internal demand for metal products by 22 per cent in 2011 to 7.7 million tons. About 6 million tons out of this amount will be provided by national metallurgical plants. At the same time, a possible lifting of restrictions (duty to the amount 15-63%) for supplies of Ukrainian metal products to Canada will allow boosting exports by another 150,000 -250,000 tons. The key risks for the national mining and smelting complex, according to the analysts, are high prices for raw materials; deficit of coking coal on the internal market with a sharp growth of prices for coal at the beginning of the year; possible introduction of restrictions for export of Ukrainian metal products to the European market. Ukraine, by results of work of metallurgical enterprises in 2010, has preserved the eighth place in the rating of 66 countries- main world producers of these products, made by the World Steel Association (WSA).