Analysis of the Ukrainian steam coal market structure

Economic Annals-ХХI: Volume 139, Issue 3-4(1), Pages: 20-22

Citation information:
Yeskov, O., & Erfort, I. (2014). Analysis of the Ukrainian steam coal market structure. Economic Annals-XXI, 3-4(1), 20-22. https://ea21journal.world/index.php/ea-v139-05/

Oleksiy Yeskov
D.Sc. (Economics),
Professor,
Donbass State Engineering Academy
72 Shkadinov Str., Kramatorsk town, Donetsk region, 84313, Ukraine
yeskov_аleksey@mail.ru

Iryna Erfort
PhD (Economics),
Associate Professor,
Donbass State Engineering Academy
72 Shkadinov Str., Kramatorsk town, Donetsk region, 84313, Ukraine
erfort_irina@mail.ru

Analysis of the Ukrainian steam coal market structure

Abstract. The researches of industrial market structures in developed countries have a strong influence on both determination and execution of government economic policy. Today the energetic safety of Ukraine depends on the coal production, that is why analysis of the Ukrainian coal market is very important. The segments of steam and coking coal markets should be considered as separate industrial markets, because of the variety of the spheres where coal is using nowadays, as well as differences in quality characteristics of coal and its natural stocks, trends of production, export and import in Ukraine.

The purpose of the article consists of providing the analysis of the Ukrainian steam coal market according to the modern methodological foundations of the industrial market analysis and developing proposals for its improvement. In the article, the Ukrainian steam coal market is classified by different characteristics. Thus, it is considered as closed, because of the difficulty for legal entry; organized, because of existing within it mechanisms of the supply and demand regulation; developed, because of the high level of its maturity. The privatization of the Ukrainian coal enterprises resulted in increasing Donbass Fuel-Energy Company’s share in coal production to 63%, so that the domestic coal market should be considered as a market with high concentration. The vertical integration, which covers coal mining, coal enriching, production of electricity and selling electricity to consumers, is an important feature of the Ukrainian steam coal market.

It is concluded that the concentration of the domestic steam coal market doesn’t lead to the effective industry development, but rises the potential threat to energy security. The industrial restructuring in order to increase competition, banning of illegal mining and the effective use of state support are suggested.

Keywords: Structure of Industrial Market; Steam Coal; Government Policy; Level of Concentration; Vertical Integration

JEL Classification: L10; L71

References

1. British Petroleum (2013). Statistical Review of World Energy.
   Retrieved from http://bp.com/statisticalreview
2. International Energy Agency (2012). Medium-Term Coal Market Report – Market Trends and Projections to 2017.
   Retrieved from http://www.iea.org/publications/medium-termreports
3. Schernikau, L. (2010). Economics of the International Coal Trade: The Renaissance of Steam Coal.
   doi: https://doi.org/10.1007/978-90-481-9240-3
4. Raymond, Li. (2010). The evolution of the international steam coal market. International Journal of Energy Sector Management, 4, 519-534.
   doi: https://doi.org/10.1108/17506221011092751
5. Zaklan, A., Cullmann, A., Neumann, A., & Hirschhausen, C. (2009). The Globalization of Steam Coal Markets and the Role of Logistics: An Empirical Analysis.
   Retrieved from http://www.diw.de
6. Amosha, O., Starychenko, L., & Cherevatskyi, D. (2013). State, main problems and prospects of the Ukrainian coal industry. Donetsk: NAS of Ukraine, The Institute of the Economy of Industry (in Ukr.).
7. Zvyagilskiy, E., & Zaloznova, Yu. (2013). About the necessity of general modernization of the Ukrainian coal industry. Donetsk: NAS of Ukraine, The Institute of the Economy of Industry (in Russ.).
8. Baker Tilly (2013, July). Ukraine Coal. Industry Report.
   Retrieved from http://www.bakertilly.ua (in Ukr.)
9. Scherer, F. M., & Ross, D. (1990). Industrial market structure and economic performance (3rd ed.). Boston: Houghton Mifflin (in Russ.).
10. The Cabinet of Ministers of Ukraine (2013). Ukrainian Energetic Strategy till 2030.
    Retrieved from http://www.rada.gov.ua (in Ukr.)
11. DTEK (2010, 2011, 2012). Annual Reports.
    Retrieved from http://www.dtek.com (in Russ.)
12. The Ministry of Energy and Coal Industry of Ukrainian (2011). Information about general indicators of development of the Ukrainian fuel and energy sector in December and 2011.
    Retrieved from http://mpe.kmu.gov.ua (in Ukr.)
13. The Ministry of Energy and Coal Industry of Ukrainian (2012). Statistical data for the period from January till December 2012.
14. Retrieved from http://mpe.kmu.gov.ua (in Ukr.)
15. The President of Ukraine (2013). National Plan 2013 for the Program of economic reforms during 2010-2014 years «Wealthy Nation, Competitive Economic, and Effective State».
    Retrieved from http://www.rada.gov.ua (in Ukr.)
16. Production of electricity and selected technical and economic indicators of power plants activity in Ukraine in 2012 (2013). Statistical Bulletin. Kyiv: State Statistics Service of Ukraine (in Ukr.).
17. The National Joint Stock Company «Energy Company of Ukraine» (2013). Information about the results of activity of stock-companies with government joint in 2012.
    Retrieved from http://www.ecu.gov.ua (in Ukr.)
18. The Verkhovna Rada of Ukraine (2014). State Budget Law of Ukraine 2014.
    Retrieved from http://www.rada.gov.ua (in Ukr.)

Received 14.01.2014