REPORT : The Impact of Geopolitical Shifts on Ukraine’s Mineral Production and Export Landscape: A Detailed Analysis of 2019-2024

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Ukraine has long been recognized for its significant contributions to the global mineral production landscape. As one of the world’s leading producers of various minerals, the country’s output has been integral to both its economy and the global supply chain. However, the hostilities and the loss of vital logistics routes through the Black Sea ports in the south have significantly affected Ukraine’s production, export volumes, and sales geography. This document provides a comprehensive analysis of Ukraine’s mineral production from 2019 to 2024, examining key minerals, economic contributions, geopolitical impacts, and government policies.

Ukraine’s Leading Mineral Production in 2019

In 2019, Ukraine was recognized for its significant contributions to the global mineral market, ranking among the top producers of several key minerals:

  • Rutile: Ukraine was the 4th largest producer, accounting for 14.4% of the world’s output.
  • Titanium Sponge: The country ranked 5th, with 4.0% of the global production.
  • Bromine: Ukraine was the 6th largest producer, contributing 1.0% of the world’s supply.
  • Ilmenite: It held the 6th position, producing 6.4% of the global output.
  • Magnesium Metal: Ukraine was the 6th largest producer, with 0.7% of the world’s output.
  • Graphite: Ranked 7th globally, Ukraine produced 1.8% of the world’s supply.
  • Iron Ore: It was the 7th largest producer, contributing 2.6% of the global output.
  • Kaolin: Ukraine held the 8th position, producing 4.2% of the world’s supply.
  • Manganese Ore: The country was the 8th largest producer, with 2.6% of the global production.
  • Pig Iron: Ukraine ranked 9th, accounting for 1.6% of the world’s output.
  • Peat: It was the 11th largest producer, contributing 2.1% of the global supply.
  • Bentonite: Ukraine held the 12th position, producing 1.1% of the world’s output.
  • Silicon: The country ranked 12th, with 0.7% of the global production.
  • Raw Steel: Ukraine was the 13th largest producer, contributing 1.1% of the world’s supply.
  • Lime: It held the 14th position, producing 0.5% of the global output.
  • Nitrogen: Ukraine was a significant producer of nitrogen (N content of ammonia), accounting for 1.1% of the world’s output.

Economic Contributions of the Mineral Sector

The mineral sector was a cornerstone of Ukraine’s economy in 2019, with substantial contributions to the country’s GDP and industrial production. Here is a detailed breakdown of the economic impact:

  • Gross Domestic Product (GDP): Ukraine’s real GDP grew by 3.2% in 2019, reaching a nominal GDP of 3.98 trillion hryvnias (approximately $154 billion).
  • Industrial Production: The total value of industrial production was 2.93 trillion hryvnias (about $114 billion).
  • Mining and Quarrying: This sector was valued at 394.8 billion hryvnias (about $15.3 billion), accounting for 13.4% of total industrial production.
  • Manufacturing: Represented 60.6% of industrial production, with significant contributions from metallurgical production (23.6%), coke and refined petroleum (4.8%), and chemical production (4.4%).

Despite these impressive figures, the overall industrial production experienced a slight decline of 0.5% in 2019, following a 3.0% increase in 2018. Specific sectors within mining and quarrying also saw varied performance:

  • Mining of Coal: Decreased by 3.1% in 2019, compared to a 6.1% increase in 2018.
  • Extraction of Crude Petroleum and Natural Gas: Increased by 0.3%, following a 2.5% increase in 2018.
  • Mining of Metallic Ores: Decreased by 2.9%, after a 4.4% increase in 2018.
  • Manufacturing of Chemicals and Chemical Products: Increased by 12.9%, compared to a 15.3% increase in 2018.
  • Manufacturing of Coke and Refined Petroleum: Increased by 3.1%, following a 6.8% increase in 2018.
  • Metallurgical Production: Decreased by 1.4%, after a 0.8% increase in 2018.

Geopolitical Impact on Mineral Production and Exports (2022-2023)

The geopolitical landscape drastically changed following Russia’s invasion of Ukraine in 2022. This section details the impact on production, export volumes, and sales geography of key minerals from 2021 to 2023.

Iron Ore Exports

In 2023, Ukraine’s total iron ore exports fell to 17.75 million tonnes, down by 26% from 22.37 million tonnes in 2022, and down 60% from 28.4 million tonnes in 2021. The hostilities and the loss of logistics routes through the Black Sea ports significantly impacted these figures.

  • Key Export Destinations in 2023: Slovakia became the largest consumer, accounting for 28.39% of total exports in monetary terms, followed by the Czech Republic (19.7%) and Poland (19.6%).
  • Shift in Export Markets: In 2021, China was the main destination, taking 41.9% of the total, with the Czech Republic at 9.6% and Poland at 8%.

Semi-Finished Steel Exports

Ukraine’s semi-finished steel exports dropped to 1.2 million tonnes in 2023, down by 36.7% from 2022’s 1.64 million tonnes and 82.2% from 2021’s 2.19 million tonnes.

  • Main Destinations in 2023: Bulgaria accounted for 36.7% in monetary terms, followed by Poland with 23%. In 2021, Italy (30.9%), Turkey (12.8%), and the Dominican Republic (8%) were the primary destinations.
  • Impact of Plant Destruction: Around 90% of the 2023 exports were steel billets, due to the destruction of key mills Azovstal and Ilyich Iron & Steel in Mariupol by Russia in 2022.

Finished Steel Exports

Ukraine’s finished long steel product exports were around 361,000 tonnes in 2023, a 75% drop from 1.5 million tonnes in 2021. Nearby European countries took 292,000 tonnes, representing about 80% of the total exports.

  • Export Shifts: In 2021, Europe took only 20%, with Africa (36.6%), the Middle East (20.6%), and South America (15.4%) being major destinations.

Hot-Rolled Coil (HRC) Exports

In 2023, Ukraine shipped 603,916 tonnes of HRC to the EU, an 18.4% increase from 509,896 tonnes in 2022. Poland was the major destination, accounting for about 42% of the total.

  • Price Dynamics: Ukrainian suppliers offered HRC at a discount compared to Europe-origin material, enhancing their competitiveness.

Government Policies and Strategic Initiatives

The Ukrainian government has implemented several policies to mitigate the impacts of the geopolitical crisis on the mineral sector. Key initiatives include:

Electronic Auctions and Investment Initiatives

The State Service for Geology and Subsoil introduced electronic auctions for land parcels prospective for various minerals, aiming to attract investment and enhance transparency.

  • Auction Mechanism: Revisions in October 2019 included automatic price reductions to attract bidders and the elimination of special government commission approvals.

Investment Atlas for Subsoil Users

Launched in December 2019, the Investment Atlas provided comprehensive data on available parcels for exploration and production, facilitating efficient and competitive distribution of licenses.

Updated Data and Current Trends (As of June 2024)

Recent trends and data provide a clearer picture of Ukraine’s mineral production and economic contributions amid ongoing challenges.

Key Mineral Production Updates

Ukraine maintains its significant role in the global mineral market, with recent figures indicating stability and resilience in production despite geopolitical tensions.

  • Rutile and Titanium Sponge: Innovations in extraction techniques have improved production efficiency.
  • Bromine and Ilmenite: Stable production levels supported by investments in infrastructure.
  • Magnesium Metal and Graphite: Increased global demand driven by battery technology and renewable energy advancements.
  • Iron Ore and Manganese Ore: Steady production contributing to economic resilience.
  • Pig Iron and Raw Steel: Modernization efforts improving productivity and sustainability.
  • Kaolin, Bentonite, and Silicon: Enhanced processing techniques increasing quality and market competitiveness.

Economic Contributions and Industrial Performance

Ukraine’s economic landscape has evolved, with the mineral sector continuing to provide stability and growth opportunities.

  • GDP Growth: Fluctuations due to external factors, but the mineral sector remains critical.
  • Industrial Production: Incremental growth supported by technological advancements and increased foreign investment.
  • Mining and Quarrying: Increased exploration activities and new mining projects driving economic growth.

Ukraine’s mineral production and export landscape has undergone significant changes due to geopolitical shifts and the ongoing conflict with Russia. Despite these challenges, the country has demonstrated resilience and adaptability, maintaining its critical role in the global mineral market. Government policies and strategic initiatives continue to support the sector, ensuring its sustainability and competitiveness in the face of adversity. This detailed analysis underscores the importance of Ukraine’s mineral resources and their impact on the national and global economy.

Resurgence in Ukraine’s Industrial Sector: A Comprehensive Analysis of the Steel Industry and Mining Performance in 2024

The first quarter of 2024 has shown significant growth in Ukraine’s industrial sector, with a notable surge in the production of steel and finished steel products. This analysis will provide an in-depth examination of the various factors contributing to this growth, highlighting key statistics, events, and trends within the steel industry and mining sectors.

Industrial Production in Ukraine: An Overview

According to data from the State Statistics Service, industrial production in Ukraine saw a remarkable increase of 11.2% in January-March 2024 compared to the same period in 2023. This growth was particularly pronounced in March 2024, where production rose by 5% compared to March 2023 and by 6.3% from February 2024.

Steel Industry and Finished Steel Products

Quarterly Performance

The production of steel and finished steel products experienced a substantial increase of 32.3% year-on-year (y/y) in the first quarter of 2024. This growth can be attributed to several factors, including a low comparison base from the previous year and enhanced utilization of iron and steel enterprises. The reopening of sea export channels for iron and steel cargo played a critical role in this uptick, allowing for more efficient export operations and better utilization of production capacities.

Monthly Analysis for March 2024

In March 2024, the steel industry production increased by 17.6% compared to March 2023 and by 14.6% compared to February 2024. This significant month-on-month (m/m) growth highlights the sector’s ongoing recovery and expansion, driven by both domestic demand and international market opportunities facilitated by improved export logistics.

Mining Sector Performance

Quarterly Insights

The metal ore mining sector also saw impressive growth, with production increasing by 33.4% y/y in the first quarter of 2024. This surge reflects the broader recovery trends in the industrial sector, supported by favorable market conditions and operational enhancements in mining practices.

March 2024 Performance

In contrast to the overall positive trend, iron ore mining production in March 2024 decreased by 2% y/y and by 6.7% m/m. This decline may be attributed to temporary operational challenges or market fluctuations that affected the mining output during the month.

Historical Context and Comparison

2023 Industrial Production Review

In 2023, Ukraine’s industrial production increased by 5.9% compared to 2022. Notably, December 2023 saw a 22.6% y/y increase and a 7.9% m/m rise. The steel sector’s annual production grew by 8% compared to 2022, despite a challenging start to the year. This growth was largely due to a strong recovery in the fourth quarter of 2023, compensating for the negative results from January to September.

Impact of the Energy Crisis in 2022

The growth in late 2023 and early 2024 can be seen in the context of the significant challenges faced in 2022. The steel industry and broader industrial sector were severely impacted by disruptions in electricity supply, caused by Russian military actions targeting Ukraine’s energy infrastructure. These disruptions led to decreased production capacities and increased operational difficulties, contributing to a low base for comparison in subsequent years.

Factors Driving Growth in 2024

Low Comparison Base

One of the primary factors contributing to the notable growth figures in 2024 is the low comparison base from 2023 and 2022. The severe disruptions and challenges faced during these years created a scenario where any recovery or improvement would appear significant in percentage terms.

Enhanced Export Opportunities

The reopening of sea export routes for iron and steel cargo has been a crucial factor in driving the growth of the steel industry. This development has allowed for more efficient and increased exports, boosting production levels and operational efficiency at steel plants.

Increased Utilization of Production Capacities

With the stabilization of energy supplies and improved export logistics, steel plants and mining enterprises have been able to operate at higher capacities. This increased utilization has directly contributed to the higher production figures observed in the first quarter of 2024.

Detailed Scheme Table of Key Data and Events

CategoryPeriodPercentage Change (y/y)Percentage Change (m/m)Key Events and Factors
Industrial ProductionJan-Mar 2024 vs. Jan-Mar 2023+11.2%Improved stability and recovery post-2022 energy crisis
Steel and Finished Steel ProductsQ1 2024 vs. Q1 2023+32.3%Reopening of sea export routes, increased plant utilization
Iron Ore MiningQ1 2024 vs. Q1 2023+33.4%Enhanced mining operations, improved market conditions
Steel IndustryMarch 2024 vs. March 2023+17.6%+14.6%Strong demand, better export logistics
Iron Ore MiningMarch 2024 vs. March 2023-2%-6.7%Temporary operational challenges, market fluctuations
Industrial Production2023 vs. 2022+5.9%Recovery from 2022 disruptions, enhanced production capacities
Steel and Finished Steel Products2023 vs. 2022+8%Recovery in Q4 2023, low base from 2022
Metal Ore Mining2023 vs. 2022-10.2%Impact of 2022 energy crisis, recovery efforts in late 2023

The industrial sector in Ukraine, particularly the steel and mining industries, has shown remarkable resilience and growth in the first quarter of 2024. This resurgence is driven by a combination of factors, including a low comparison base, improved export opportunities, and increased utilization of production capacities. The detailed analysis of the data and events highlights the ongoing recovery and the potential for sustained growth in the future, despite the challenges faced in previous years.

The performance in 2024 thus far suggests a promising outlook for Ukraine’s industrial sector, provided that stability in energy supply and favorable market conditions continue. The increased production and export capabilities bode well for the country’s economic recovery and growth, marking a significant turnaround from the difficulties experienced during the energy crisis of 2022.

Ukraine’s Impact on EU Iron Ore Imports: Analyzing January-April 2024 Data and Technical Insights

Based on the latest data from January to April 2024, Ukrainian mining companies have significantly contributed to the EU’s iron ore imports. Here is a detailed analysis and technical data about the imports and capabilities:

Export Data and Volumes

  • Total Exports to the EU
    • Ukrainian Iron Ore to the EU: 5.11 million tons, an increase of 3.7% year-on-year.
    • Total EU Iron Ore Imports: 24.58 million tons, a decrease of 1.8% compared to the same period in 2023.
    • Percentage Share of Ukrainian Imports: 20.8% of total EU imports.
  • Main Consumers:
    • Slovakia: 1.83 million tons (+0.3% y/y)
    • Czech Republic: 986.4 thousand tons (-35.4% y/y)
    • Poland: 1.44 million tons (+6.2% y/y)
    • Germany: 317 thousand tons (5.8 times increase y/y)
  • Monthly Data for April 2024:
    • Iron Ore Imports from Ukraine: 1.44 million tons, an increase of 14.8% month-on-month (m/m) and 13% year-on-year (y/y).
    • Import Costs: €162.87 million, an increase of 4.8% m/m and a slight decrease of 0.06% y/y.

Financial Data

  • Expenditure on Raw Materials:
    • January-April 2024: €614.83 million, an increase of 5.8% compared to the same period in 2023.
  • Costs in April 2024:
    • Import Costs: €162.87 million, up 4.8% m/m, down 0.06% y/y.

Major EU Importers

  • Netherlands: 8.3 million tons (+23.6% y/y)
  • Germany: 5.02 million tons (+21.5% y/y)

Production and Capacity of Ukrainian Iron Ore Plants

  • Ferrexpo: Produced 1.97 million tons of pellets in H1 2023.
  • Metinvest: Utilized 35-40% of pre-war levels.
  • ArcelorMittal Kryvyi Rih: Operating at 40% capacity.
  • Rudomine: Operating at 50% capacity.
  • Kryvyi Rih Iron Ore Plant (KZHRK): 40-50% capacity utilization.
  • Zaporizhzhia Iron Ore Plant: Currently not controlled by Ukraine.
  • General Production: 60% of all iron ore exports were previously through Black Sea ports.

Technical Data Sheet

CountryImport Volume (Jan-Apr 2024)Change y/yImport Cost (Jan-Apr 2024)Change y/y
Slovakia1.83 million tons+0.3%
Czech Republic986.4 thousand tons-35.4%
Poland1.44 million tons+6.2%
Germany317 thousand tons+580%
Total EU24.58 million tons-1.8%€614.83 million+5.8%
Ukrainian Share5.11 million tons+3.7%€162.87 million (April)+4.8% m/m, -0.06% y/y

Capabilities

  • Transportation and Logistics:
    • The blocked Black Sea ports significantly impact the logistics and export capabilities of Ukrainian iron ore.
  • Production Facilities:
    • The operational capacity of major mining facilities varies from 35% to 50% of pre-war levels, indicating limited production capability due to ongoing geopolitical issues.

This comprehensive analysis underscores the importance of Ukrainian iron ore in the EU market and highlights the challenges faced due to geopolitical factors. For further details, refer to sources such as GMK Center and SteelRadar​

US Senator Highlights Strategic Importance of Ukraine’s Mineral Wealth Amid Geopolitical Tensions

Lindsey Graham’s Assertion on Ukraine’s $12 Trillion Mineral Wealth

In a recent interview on CBS’s “Face the Nation,” Senator Lindsey Graham emphasized the significant strategic value of Ukraine’s mineral resources, estimated to be worth between $10 to $12 trillion. This assertion places Ukraine’s mineral wealth at the forefront of geopolitical considerations, particularly in the context of the ongoing conflict with Russia and the broader implications for Western economic and strategic interests.

Graham underscored that Ukraine’s mineral reserves, which include vast deposits of critical minerals such as titanium, iron ore, lithium, and coal, have the potential to transform Ukraine into one of Europe’s wealthiest nations. He cautioned against the possibility of these resources falling under Russian control, a scenario he argued would have severe repercussions for the West, particularly in terms of strategic autonomy and economic security.

The Geopolitical Significance of Ukraine’s Mineral Resources

The Washington Post, in a 2022 report, described the conflict in Ukraine as a “battle for the nation’s mineral and energy wealth.” The report highlighted that Ukraine is home to some of the world’s largest reserves of titanium and iron ore, as well as significant untapped deposits of lithium and coal. Additionally, Ukraine’s natural gas, oil, and rare earth minerals reserves are critical for high-tech industries and energy security.

According to the Post, the total value of these resources is estimated at $12.4 trillion, predominantly located in the eastern regions of Ukraine, where the most intense fighting has occurred. This underscores the strategic importance of these areas and the broader implications of the conflict on global supply chains for critical minerals.

US Policy and Legislative Framework on Ukraine’s Mineral Wealth

The strategic importance of Ukraine’s mineral resources has been recognized at the highest levels of US government policy. The US Code of Laws includes provisions for cooperation with Ukraine in the titanium industry, positioning Ukraine as a potential alternative source to Chinese and Russian supplies. This policy is part of a broader strategy to secure critical mineral supply chains and reduce dependence on adversarial nations.

In recent years, the US has taken several legislative and policy actions to secure access to critical minerals. The Critical Minerals Security Act, introduced in January, aims to strengthen US access to these resources and counter Chinese dominance in the industry. This legislative effort reflects a growing recognition of the importance of securing reliable and diversified sources of critical minerals.

Ukraine’s Anti-Democratic Trends and Economic Reforms

While Ukraine’s mineral wealth presents significant economic opportunities, the country’s political landscape has raised concerns. President Volodymyr Zelensky, who has extended his term in office beyond its official end, has faced criticism for imposing state control over media and banning opposition parties. These actions have led to accusations of increasing authoritarianism and undermining democratic principles.

Despite these concerns, Zelensky has pursued aggressive economic reforms, including mass privatizations and inviting foreign investment. In 2022, he virtually rang the opening bell of the New York Stock Exchange, signaling that Ukraine was “open for business” and offering $400 billion in investment opportunities. These reforms aim to leverage Ukraine’s mineral wealth to attract foreign investment and stimulate economic growth.

The Strategic Implications for the West

Senator Graham’s comments reflect a broader strategic imperative for the West to maintain access to Ukraine’s mineral resources. He argued that the West “can’t afford to lose” the war in Ukraine, emphasizing the critical importance of these resources in the context of global economic and strategic competition.

The US and its allies have also sought to limit China’s access to critical minerals. US Energy Secretary Jennifer Granholm expressed concerns about China’s dominance in the global supply chain for these minerals. The Biden administration has taken steps to reduce reliance on Chinese and Russian supplies, including signing an executive order to secure critical mineral supply chains.

Seizing Russian Assets to Fund Ukraine

In his CBS interview, Graham also called for the seizure of Russian assets abroad to fund Ukraine’s war efforts. He suggested that the $300 billion in frozen Russian foreign exchange reserves should be used to support Ukraine. This proposal, while controversial, underscores the high stakes of the conflict and the lengths to which the West is willing to go to support Ukraine.

Senator Lindsey Graham’s remarks highlight the immense strategic value of Ukraine’s mineral resources and the broader geopolitical implications of the ongoing conflict. As the West seeks to secure its access to critical minerals and counter the influence of Russia and China, Ukraine’s mineral wealth will continue to play a pivotal role in shaping global economic and strategic dynamics. The situation underscores the complex interplay between natural resources, geopolitical strategy, and economic policy in the contemporary international landscape.

2024 – Analysis of Recent International Events and Their Impact on Ukraine

From June 11-16, several pivotal international events were held, expected to significantly bolster Ukraine’s resilience and progress towards victory. These events include the Ukraine Recovery Conference 2024 (URC2024), the G7 meeting, and the Global Peace Summit. This document provides a detailed analysis of these events, along with an updated overview of Ukraine’s economic indicators, foreign aid, and energy challenges. Additionally, a comprehensive scheme table summarizing all pertinent information is included.

URC2024: A Pathway to Ukraine’s Recovery

The Ukraine Recovery Conference 2024 (URC2024) took place in Berlin from June 11-12. Attended by 3400 participants, including government representatives, civil society, and businesses, the conference aimed to attract additional funding for various reconstruction projects in Ukraine.

Key Agreements and Initiatives

Financial Assistance and Cooperation:

    • Energy Infrastructure Reconstruction: Agreements were signed to finance the reconstruction of energy infrastructure.
    • Decentralized Electricity Generation: Projects for decentralized electricity generation received significant attention and funding.
    • Business Financing: Financial assistance was extended to businesses across various sectors.

    Skills Alliance Initiative:

      • Training and Retraining: Aimed at addressing structural unemployment through the introduction of a comprehensive training and retraining system for employees.

      SME Alliance:

        • Support for SMEs: Increased funding to support small and medium-sized enterprises.

        Reinsurance Program:

          • Risk Coverage: Introduction of a reinsurance program for political, military, and other risks to facilitate investment in Ukraine.

          G7 Meeting: Financial Support and Asset Freezing

          On June 13, G7 leaders approved a loan to Ukraine amounting to USD 50 billion. The interest and repayment of this loan will be covered by profits from frozen Russian assets.

          Key Decisions

          • Loan Distribution: While detailed distribution plans are pending, it is anticipated that the funds will support both defense and reconstruction efforts.
          • Asset Freezing: Continued freezing of Russian assets to ensure financial coverage for the loan.

          Global Peace Summit: Commitment to Stability

          The Global Peace Summit, held in Switzerland on December 16, brought together representatives from 101 countries. The summit concluded with the signing of a joint communiqué by 78 states and four organizations.

          Key Topics

          • Nuclear Power Plant Operations: Ensuring the safe operation of Ukraine’s nuclear power plants, including the Zaporizhzhia Nuclear Power Plant (ZNPP).
          • Agricultural Exports: Safe export routes for Ukrainian agricultural products.
          • Return of POWs and Children: Initiatives to secure the return of prisoners of war and children taken to Russia.

          Economic Indicators and Real Sector Performance

          GDP Growth

          According to the Institute for Economic Research (IER), real GDP growth in Ukraine slowed to 3.5% year-on-year (yoy) in May, down from 4.2% yoy in April. This deceleration is attributed to the ongoing destruction of electricity generation capacities by Russian attacks and a higher comparison base from the previous year.

          Sectoral Analysis

          • Manufacturing: Growth slowed to 5% yoy from 11% yoy due to electricity supply restrictions.
          • Extractive Industry: Real Gross Value Added (GVA) increased by 2% yoy, driven by stable production of gas, iron ore, and construction materials.
          • Transport: Real GVA in transport rose by almost 15% yoy, benefiting from improved logistics and the Ukrainian Sea Corridor’s operations.
          • Trade: Increased by almost 6% yoy, with significant expenditures on devices and appliances to ensure household resilience during power outages.

          Updated Data

          New information indicates better-than-expected growth in metallurgy, with steel production by Ukrmetprom enterprises increasing by more than 26% yoy. This improvement is likely due to direct electricity import contracts by individual companies.

          Energy Sector: Addressing the Shortage

          Electricity

          Ukraine continues to face significant electricity shortages, with Russian shelling destroying 50% of the power generating capacity. To mitigate the deficit, the government has recommended minimizing the use of air conditioning and outdoor lighting. The state-owned energy trader JSC Energy Company of Ukraine (ECU) has doubled electricity imports in May to 448 million kWh.

          Gas and Coal

          • Natural Gas: Ukrgasvydobuvannya increased production by 10% in the first five months of 2024. The rapid accumulation of gas in underground storage facilities is a positive sign.
          • Coal: The Cabinet of Ministers has permitted the export of 1.1 million tons of coal, ensuring the operation of state-owned coal mining enterprises.

          Transport: Resumption and Growth

          Maritime Transport

          Seaports handled 8.3 million tons of cargo in May, a 17% decrease from April. However, Maersk and other shipping companies are resuming container services, enhancing trade capacity.

          Rail Transport

          Ukrzaliznytsia transported 15.5 million tons of cargo in May, marking a 2% increase from April and a 35% increase from May 2023. Passenger traffic also saw significant growth, with domestic traffic increasing by 22% yoy.

          Road Transport

          Exports by road increased by 10.7% in May, driven by the absence of border blockades. Ukraine and Slovakia have agreed to simplify procedures for opening international bus routes, further enhancing connectivity.

          Foreign Trade: Stability in Exports

          Export Data

          Customs data for May shows that exports remained stable at around USD 3.4 billion. Agricultural exports decreased slightly, while metallurgical exports reached their highest levels since the beginning of the year.

          Import Data

          Imports decreased slightly to USD 5.6 billion in May, primarily due to lower imports of chemical products. Energy imports and purchases of generators and batteries remained steady.

          State Budget: Favorable Financing Conditions

          Revenue and Deficit

          State budget revenues in May amounted to UAH 229 billion, with the general fund receiving UAH 152 billion. Despite lower revenues from certain taxes, overall revenue collection exceeded plans. The budget deficit remained smaller than expected due to low external borrowings and controlled domestic borrowing rates.

          IMF and EU Support

          Ukraine reached a staff-level agreement with the IMF for the fourth review of the program, potentially unlocking USD 2.2 billion. The EU is also expected to disburse EUR 1.9 billion in June under the Ukraine Facility support mechanism.

          Inflation and Monetary Policy

          Consumer Inflation

          Consumer inflation remained stable at around 3.3% yoy in May. However, rising costs for businesses and a weakening hryvnia may lead to higher inflation in the coming months.

          Exchange Rate and Policy Rate

          The hryvnia exchange rate exceeded UAH 40 per dollar in June, influenced by increased demand for cash currency. The National Bank of Ukraine (NBU) reduced the policy rate from 13.5% to 13% per annum, aligning with inflation forecasts.

          Reserves and Interventions

          NBU’s international reserves fell to USD 39 billion in May, primarily due to reduced external financing and significant interventions to stabilize the hryvnia. Expected funds from the IMF and EU in June should bolster the reserves.

          Detailed Scheme Table

          CategoryMay 2024 DataJune 2024 Updates
          GDP Growth3.5% yoyContinued deceleration due to energy issues
          Manufacturing Growth5% yoySlowed from 11% yoy
          Extractive Industry2% yoyStable production in gas, iron ore
          Transport Sector15% yoyImproved logistics
          Trade Sector6% yoyIncreased household expenditures
          Electricity Imports448 million kWhDoubled compared to previous months
          Natural Gas ProductionIncreased by 10%Rapid accumulation in storage facilities
          Coal ExportPermitted volume: 1.1 million tonsEnsured operation of coal mining enterprises
          Seaport Cargo8.3 million tons17% decrease from April
          Rail Cargo15.5 million tons2% increase from April
          Road Transport Exports893.3 thousand tons10.7% increase from April
          Export ValueUSD 3.4 billionStable with slight fluctuations
          Import ValueUSD 5.6 billionSlight decrease
          State Budget RevenueUAH 229 billionGeneral fund: UAH 152 billion
          Consumer Inflation3.3% yoyStable with potential future increase
          Hryvnia Exchange RateExceeded UAH 40 per dollarNBU interventions to stabilize rate
          NBU ReservesUSD 39 billionExpected increase with IMF and EU funds

          The events and economic indicators from June 2024 highlight Ukraine’s ongoing challenges and progress amidst the conflict. The agreements from URC2024, financial support from the G7, and commitments from the Global Peace Summit underscore international solidarity with Ukraine. However, the persistent energy shortages and economic deceleration indicate the need for sustained support and strategic investments. Future updates will be crucial


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