UKRMETALURGPROM

CHALLENGES & OPPORTUNITIES

UKRMETALURGPROM

The Association of Enterprises METALURGPROM was established

according to the Decree of the President of Ukraine

The Ukrainian Association of Ferrous Metallurgy Enterprises was founded by decision of 28 National

Metallurgical entities

The amalgamation of both entities into the Association of Enterprises UKRMETALURGPROM

Association UKRMETALURGPROM became an Affiliated Member of the World Steel Association

MEMBERS OF ASSOCIATION

Association UKRMETALURGPROM Chronology

1995

1998

2016

STEELMAKING COMPANIES15IRON ORE MINING&PROCESSING FACTORIES3

R&D AND EDUCATIONAL INSTITUTIONS8COMMERCIAL COMPANIES4

1

UKRMETALURGPROM 2

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

UKRMETALURGPROM 3

EVRAZ DMZ

Dniprovsk MP

Zaporizhstal

DSSArcelorMittalKrivyi Rih

Alchevsk MPEnakievo MP

Donetsk-steel

DMWP

MMP IllyichAzovstal

SIMFEROPOL

KHERSON

MYKOLAIV

LUHANSK

ZAPORIZHZHIA

DNIRPO

DONETSK

KROPYVNYTSKYI

CHERKASYPOLTAVA KHARKIV

DEMP

Location of Steel-Making Plants in Ukraine

Plants within the controllable

territory of Ukraine

Plants beyond the controllable

territory of Ukraine

UKRMETALURGPROM

9%

91%

18%

5%

2%

75%

4

PRODUCTION

Share of Ferrous Metallurgy in the Ukrainian Industrial Complex in 2016

25%

STEEL MAKING

other Ukrainian Industries

COKE PRODUCTION

IRON ORE PRODUCTION

FERROUS METALLURGY

Other Ukrainian Industries

300’000 employees

3’000’000 employees

MANPOWER9%

UKRMETALURGPROM

Open Hearth Steel4,8420%

Basic Oxygen Steel17,9174%

Electric Arc Steel1,456%

5

Crude Steel Production by Processes in 2016 (Mio MT & %)

24,2100%

Main Metallurgical Production Facilities in Ukraine (2017)

Changes in Steel Production Facilities by Processes for 10 years

48%

23%

48%

69%

4% 8%

2007 2017

OHF Steel BOS EA Steel

Blast Furnaces Open Hearth

Furnaces

Basic Oxygen

Furnaces

Electric Arc

Furnaces

Concast Machines

(49% of total casting)

21 7

8 1

15 67 8

12 6

Work Timeout

UKRMETALURGPROM 6

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

Dynamics of the Crude Steel Production in Ukraine (Mio MT)

42

33

2422 22

2624

27

32 33 3437 37

3941

43

37

3033

3533 33

27

23 2421

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

F

UKRMETALURGPROM

10 195

12 654

10 618(84%)

EXPORT

DOMESTIC

MARKET

2 036(16%)

8 477(83%)

EXPORT

DOMESTIC

MARKET

1 718(17%)

7 months

2016

7 months

2017

IMPORT

Long Product

Semiproducts

Flat Product

10 618EXPORT

2 800

(26.4%)

2 985

(28.1%)

4 833

(45.5%)

2 091

(24.6%)

2 925

(34.6%)

3 461

(40.8%)

8 477

7 months

2016

7 months

2017

7 months

2016

7 months

2017

Long Product

Flat Product

Semiproducts

584,6

685

198.6

(34%)

376.2

(64.3%)

9.8

(1.7%)6.4

(0.9%)

267.9

(39.1%)

410.7

(60%)

-2 459

(-19.4%)

-2 141

(-20.1%)

UKRAINIAN STEEL PRODUCTS:

Production & Consuming (‘000 MT, 7 months 2017)

STEEL PRODUCTS IN UKRAINE:

Export & Import (‘000 MT, 7 months 2017)

7

UKRMETALURGPROM 8

Geography of the Ukrainian Steel Products Export in 2015/2016 (‘000 MT)

17

104

123

195

262

764

1 076

1 442

2 186

2 529

2 887

6 102

149

264

575

93

117

70

1 296

1 544

2 501

2 495

2 715

5 320

Asia

India

CIS

Latin America

NAFTA

Europe

Africa

Russia

Turkey

Middle East

Egypt

EU-28

2015: 17,14 Mio MT

2016: 17,69 Mio MT

UKRMETALURGPROM 9

Geography of Ferrous Metallurgy Goods Import in 2015/2016 (‘000 MT)

2

3

20

24

392

486

116

12

238

19

340

84

China

India

Egypt

Turkey

Russia

EU-28

2015: 809’800 MT

2016: 927’000 MT

UKRMETALURGPROM

0

10

20

30

40

50

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

27

$/MTUAH Bio.

10,5

8,6

5,04,5

6,4 6,3 6,2 6,4

8,3

9,7

0,0

0,5

1,0

1,5

2,0

2,5

0

2

4

6

8

10

12

USD Bio

Dynamics of Capital Investments into theUkrainian Ferrous Metallurgy

Capital Investments per Ton of Crude Steel in Ukraine

The Adverse Investment Climate and Difficulties to Gain Foreign Investments Impede the Active

Modernization of the Industry

The average level of capital investments per ton of crude steel in Ukraine for last 10 years is about USD 27 per ton

2016201520142007 2009 2011 2013201220102008

10

UKRMETALURGPROM

21 21,5 22 22,5 23 23,5 24 24,5 25 25,5

0

5

10

15

20

25

30

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

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

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

11

UKRMETALURGPROM

Export and Domestic Finished Steel Products Deliveries Forecast 2017-2026 (Mio MT)

15,8 15,5 15,3 15,3 15,3 15,3 15,3 15,3 15,3 15,3

3,2 4 4,7 5,1 5,6 6,1 6,5 7 7,4 7,9

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

ExportDomestic

19 19.5 20 20.4 20.9 21.4 21.8 22.323.222.7

The Ukrainian steel product export will reduce from 15.8 Mio MT to 15.3 Mio MT per year and starting since 2019won’t be increased anymore due to stabilization of exporting markets. At the same time the significant increasing ofdeliveries to the domestic market with a rate of 0.4…0.5 Mio MT per year is expected.

12

UKRMETALURGPROM

MAIN GOALTo Provide the Comfortable and Favorable Conditions for the Most Efficient

Activity and the Stable Advancement of the Ukrainian Ferrous Metallurgy

GOALS & ACTIVITIES

The Strategic Development of the Industry

The Trade Policy of the Industry and the Country

The Raw Materials and Logistical Provision

The Production, Technical, Technological and Energy Efficiency

The Technical Regulation and Metrology The Industrial and

Environmental Safety

The Fiscal Policy

13

UKRMETALURGPROM

THANK YOU FOR YOUR ATTENTION!

www.ukrmetprom.org