With about 33 m tons of steel production Ukraine belongs to the group of the ten largest steel producers in the world. Ferrous metallurgy was the first branch of Ukrainian industry to regain growth after the start of transformation. Steel production grew continuously since 1995. After the record growth in 2000, growth of production declined to about 5% in 2001.
The share of the steel industry production in total industrial gross production increased from 11% in 1990 to 27.4% in 2000. However, these data, as often used in the press, overestimate the importance of metallurgy to the economy. More informative are data on value added, which better reflects the contribution to the welfare of the economy. By this measure, metallurgy’s share in industry was slightly more than 11% in 2000, while only 5% of GDP is created in the steel industry. From this one might estimate that in 2000 metallurgy contributed to the growth of GDP about one percentage point, which accounted for 18% of total GDP growth of 5.8%. However, in 2001 only about 0.25 percentage points or 3% of the 9% GDPgrowth can be attributed to the steel and iron production.
More than 60% of total production was exported in the last years. Ukraine is the 4th biggest steel exporter in the world after Japan, Russia and Germany. Over 6 billion US-$, almost half of total export earnings, are generated in the metallurgy sector. However, the net contribution of the steel industry to Ukrainian foreign earnings is somewhat lower. Although the imports of ferrous metals amount to only 5% of domestic production, the branch needs imports for production, in particular energy. About 30% of the gross production has to be spent on energy inputs, which partly have to be imported.
