Can Ukraine save iron ore?

Well, you learn something every day. Australia does have a big stake in what happens in the Ukraine after all. It turns out that it is a substantial iron ore exporter. From Credit Suisse:

In 2013 Ukraine exported 38 Mt of iron ore (Exhibit 20), of which 45% was shipped toChina (Exhibit 21). Recent events have understandably led to concerns that shipments could be disrupted, offsetting some of this year’s forecast 11% increase in seaborne supply (see Waiting for the Fall).

There have been disruptions to date and little market reaction either. The reason may be that the geography of shipping is relatively secure:

Ascertaining the exact share of exports from each Ukrainian port is difficult but the country’s trade data show a regional breakout of the exports’ origin:

• 65% Dnipropetrovsk
• 29% Poltava 
• 5% Zaporizhe

The Poltava tonnage should be accounted for by Ferrexpo’s operations, from where tonnes are railed to port at Odessa (west of the Crimea) or railed directly into Poland and Slovakia.

With regards Dnipropetrovsk, these volumes should be dominated by Metinvest’s production from Kryvyi Rih. While some tonnes may be exported via the port of Mariupol (to the east of Crimea), the site of Metinvest’s Ilych and Azovstal steel works, the majority seem likely to be railed to the ports of Yuzhny and Mykolaiv (both to the west of Crimea) or, again, straight to the country’s western border.

The final option, which, given its location on the river, may apply to Zaporizhe, is for iron ore to be barged down the Dniper. The mouth of the river is to the west of Crimea.

Things would need to go really pear-shaped to upset the trade flows.