After the explosive resumption of iron ore exports in early 2024, which occurred due to the opening of the marine corridor, the mining sector of Ukraine reached almost 50% of its pre-war levels. But now the indicators are rapidly declining, and this threatens the Ukrainian economy with an even greater crisis.
Ekonomicheskaya Pravda writes about this.
"Since the beginning of 2025, the volume of ore sales abroad has been decreasing again: in January-April, it fell by 10.2% compared to the same period in 2024 to 11.15 million tons. In monetary terms, the losses are even greater: almost 21%. In 2025, the physical volume of ore shipments for export may fall by 15% to 27 million tons. Enterprises are talking about the risk of an even deeper fall," the publication points out.
The EP recalled that the ore sector is the third largest source of foreign exchange earnings in Ukraine after butter and corn, so its crisis is hurting the economy. Although global ore prices are higher now than in 2015-2018, the main problem is domestic costs and global demand.
"Rising prices for electricity and logistics services make Ukrainian ore less competitive. According to Nikolai Klavdiev, Chief Financial Officer of Ferrexpo, in the second half of 2024, production costs increased by $11 to $76.5 per ton of cotton with a 65 percent iron content. Metinvest adds to these costs a significant amount of excise tax in the price of diesel fuel – almost a quarter of its cost, although mining equipment does not travel on the highways for which this tax is intended. This factor was the last straw for stopping the Inguletsk Mining and Processing Plant in the summer of 2024," the article says.
Meanwhile, Ukrzaliznytsia's plans to raise freight tariffs by 37% will mean an increase in the logistics component by another 2.7% in the sector, where it has doubled since 2022.
However, the prospects of the country's mining complex look darker than before, and not only because of the internal problems of the industry, writes EP. The global metallurgical sector expects a "long cold winter": the average price of ore may drop to $ 73 per ton. This is a serious challenge for Ukrainian manufacturers.
"The impacts of the MMC crisis on the Ukrainian economy will be felt much more strongly in the context of turbulence in the country's largest export sector, the agro-industry, because the "trade visa-free" regime has been in effect since June. There is already a two–fold difference between imports to and exports from Ukraine. Crisis events in key export sectors - agriculture and mining – may further strengthen this disparity," the publication concluded.
