Yaresko A.M., Burlakova O.M., Finogeeva E.V.

Oles Honchar Dnipropetrovsk National University, Ukraine

MAIN PROBLEMS AND PROSPECTS OF FERROUS METALLURGY IN MODERN CONDITIONS IN UKRAINE

Siderurgy is an important field of heavy industry, one of the main parts the foundation's of the entire national economy. It affects the development of all its sectors of the economy. Siderurgy has an enormously favorable economic conditions for development in Ukraine, because the heavy industry is well-developed especially machine building and metalworking, that produce 15.5% production of total industrial production of the country.

Domestic Iron and Steel Complex has proved one of the most affected complexes by current financial crisis in the world. Ukrainian metallurgical enterprises significantly have reduced the production of metal products, and lost a significant share of foreign of the markets.

Naturally, the deep decline in production in the steel industry has became one of the most important factors of the crisis of Ukrainian economy because from the activity of the steel industry depends the functioning of the major consumers of steel products — machine building, of construction industry and agriculture.

Nowaday the state of the metallurgical complex of Ukraine requires major changes in the conduct of industrial policy. The basic needs of resuscitation of development Ukrainian metallurgy industry strategies should be focus on solving such problems.

The first, the Ukrainian metallurgy is characterized by the technology lag compared with the developed countries of Europe and the world. Enterprises steel industry are equipped with old, worn-out equipment, steel mills operate in excess of normative terms. The degree of deterioration of capacity for the different estimates is 50-70%, more than half of total steel is produced on equipment above terms of use. The annual depreciation of equipment in the field reaches 3.5 billion USD, but the recovery takes no more than 1.5 billion. So, updating the core funds is the most important issue, which needs to be immediately addressed for the further development.

Secondly, metallurgy in Ukraine is too energy intensive. To realize this problem should be implemented in the steel industry programs to significantly reduce the costs of all types.

Low metal content in the raw materials requires ore dressing. Of course, it’s necessary to search the most effective ways to enrichment it.

Energy capacity of steel production in Ukraine is 2-10 times higher than in other countries.

According to experts for restructuring, modernizing and upgrading the steel industry of Ukraine will need to order 13 billion US dollars. Search for funding sources and providing sustainable development is a significant problem in the conditions of financial crisis.

In connection with all the above mentioned problems, there is one of the main problems of the steel industry: non-competitiveness and great value products. Most of the exports of Ukrainian enterprises sold at prices slightly lower (10-20%) than in the world. The reasons are several, but the key is the lower quality products than products in the world.

Now the most affordable markets for Ukraine are Asia and North Africa. Many countries, including Vietnam, Iran, Israel, Pakistan, UAE, Qatar and others by a significant excess of demand over domestic proposal is almost completely. They were abolished import duties on all steel products. As mark the observers in these regions continued implementation of most infrastructure projects, as the demand for steel products decreased at a slower pace than in other parts of the world.

In addition, the rerolling industry in the developed countries actively consuming preparations, because the majority of species do not fall under restrictions because of domestic steel companies are free to export.

These semi-manufactured take the strong positions of Ukrainian metallurgy. The high proportion of metallurgy within domestic exports and within foreign exchange revenues significantly affects the External Trade Policy of Ukraine and on the processes of economic integration. In particular, to the crisis period (first half of 2008) exports of this sector amounted to 43.3% of exports of the country, providing nearly 32% revenues of foreign exchange in Ukraine. Now the fate of metallurgy in the national commodity exports slightly declined . Metallurgy is also a powerful source of capital, which then flow into other sectors of economic complex, stimulating their development. The financial flows from the metallurgical complex are moving in the bank system, engineering, construction, significant investment are implementing in human development (in particular — the development of domestic sport).

In particular, due to a sharp decline in production in metallurgical production speedily decreased volume of foreign currency revenues, volume investment had reduced, significantly decreased production in related industries, unemployment increased and worsened the overall socio-economic status of settlements, where steel production is town-forming.

Efficient operation of metallurgical industry, which is the significant segment of the real sector of the domestic economy, causes an increase in wealth throughout the country. Solving the major problems which brake the development of the steel industry should be the basis for the anti-crisis economic policy.