Due to the blockade of Black Sea ports, Ukrainian mining and metallurgical enterprises are forced to reduce production and redirect exports to more expensive alternative routes. According to experts, the industry could lose more than half of its export volumes if maritime transport is not restored. This was reported by GMK Center, according to the portal PromPolitInform.
Russian shelling of port infrastructure, which intensified after July 22, led to the actual suspension of shipping in the ports of Greater Odesa. Ship owners are refusing to call at Ukrainian ports due to critical increases in risks and insurance costs.
Consequences for the industry and production
Export indicators of the mining and metals complex (MMC) showed a sharp decline as early as July. Pig iron shipments fell by 72% compared to the previous month, while supplies of semi-finished products decreased by 34%.
Production capacities are being forced to stop due to the inability to ship accumulated products. In particular, the Southern Mining and Processing Plant and the Ferrexpo company, whose vessel with finished products was damaged as a result of an enemy attack, suspended their operations.
Alternative logistics and its limitations
Diversifying supplies through Danube ports, western railway crossings, and road transport cannot fully replace the maritime corridor. The total throughput capacity of existing ground routes is only 50–55% of the pre-war capacities of Greater Odesa ports.
The operation of Danube ports is complicated by the shallowing of the river, which leads to reduced barge loading and longer travel times for each trip. In turn, railway transport via the western border is constrained by the limited throughput of European infrastructure networks.
Financial pressure on enterprises
The situation is exacerbated by the decision of JSC Ukrzaliznytsia to increase freight tariffs by 30% from August 1. This leads to an increase in the cost of transporting each ton of cargo, making the export of certain product categories economically unfeasible.
Total losses of the metallurgical industry from the shutdown of ports could exceed $200 million per month. In addition to direct losses from reduced exports, companies are facing rising raw material costs and the loss of economies of scale.
Illustrative photo: Valentin Ramirez / Public domain
