In 2000 Ukrainian ferrous metallurgy ran booming business, however it could not manage main problems of development in the new conditions. Since late decade ferrous metallurgy has orientated itself to world market, sometimes coming into conflict with needs of national economy. Past year was not the exception to the rule. Ferrous metallurgy has been one of the export-oriented branches of domestic industry. Integration of national ferrous metallurgy and world market continues. Every second dollar, which was earned by Ukraine last year, was obtained due to Ukrainian metal (metallurgy earned nearly $8 billion). That is why metallurgical companies make up high national business. Ukrainian metallurgical companies hinted about normal working without hidden profit with normal state taxation in Ukraine last year. It is possible to expand production and be all even with its partners. Mining and smelting branch plays a large role in national economy, industrial and export potential. Its part amounts to 22% of all the industrial production of Ukraine and nearly 63% of Ukrainian export. It employs approximately 550 thousand persons. Today, crisis of Ukrainian ferrous metallurgy is a subject of discussion. Firstly, I want to stress in my term paper, there is not any crisis of mining and smelting branch. Volume of commodity output amounted to UAH 20,2 billions in 1998. Export of metal production gave 4,2 billions USD. All the enterprises of branch work and do not loss its potential; branch is ready to increase volume of output in any time. Crisis exists in metal-consumpting branches: building, transportation, machine- and shipbuilding and etc. In light of home market loss metallurgical works could not manage sales. Metallurgical works had to decrease volume of commodity output and to take some fixed assets out of exploitation. Home market, in the new economic situation in Ukraine, was not ready to consume volume of commercial output and will be unready to consume it within the next few years. Therefore, huge merit of mining and smelting branch lay in fast reorientation to foreign market, not losing its potential and supporting national economy in that hard time. Along with this situation, in spite of negative process of home market and severe competition on foreign market (as a result there is decrease of volume of commercial output, deterioration of financial state of metallurgical works), well-defined actions on restructuring of the branch were being taken in course of 1995-1999. First of all, enterprises decreased essentially raw material consumption and energy consumption on output of products. For example, coke consumption per ton of cast iron in 1995-1999 was decreased to 6 per cent, energy consumption - to 10-15 per cent; steel consumption per one ton of rolled iron - to 33 kilogram. This is objective showing of technology level of production improvement. But, attained results on cutting down of raw material and energy consumption on output of products should be strongly maintained. In the second place, nearly all the enterprises of the branch install new equipment, guide reconstruction and modernisation of production. For example, industrial complex in Mariupol and industrial complex in Dneprodzerjinsk put into operation machines of continuous casting. As a result, share of steel, made by continuous method, has amounted to 20 per cent. First example of high investment attraction and modernisation is Donetsk metallurgical works, where there is completion of building new powerful electric furnace steelmaking, which will work within cheap domestic scrap metal. In mining and smelting branch operation of withdrawal surplus equipment and reduction of workforce in accordance with volume of commercial output is slowly put. In most cases large-scale enterprise in metallurgical branch is hail growth centre. As a rule social sphere costs of a town are burden on metallurgic enterprise. This has an effect on prime cost and competitiveness of commercial output. At the beginning of 2000 Ukrainian ferrous metallurgy faced quite encouraging economic situation. Companies came out of unfavourable external market conditions. And they used amenities of so called "mining and smelting complex experiment (MSC)", started in third quarter 1999. But the essentials of 2000 - owners and managers of metallurgical works managed to come to an agreement about branch cash flows. As a consequence, situation in the most powerful export-oriented branch was stable. Towards the end of 2000 it was clear that continuous privatisation of metallurgical works had not modified the situation. It was only legalisation of current financial and industrial groups. Shape of vertically integrated companies was beaded. These vertically integrated companies were jointed by enterprises, which represented practically all the stages of metallurgical production: coal, ore - coke - metal - pipes. Considering incompleteness of privatisation of the branch enterprises, vertically integrated companies are still in rather unsteady (juridically) relation with them. It means commitment of state share holding to appropriate private institutions. Till recently such appropriate private institutions had been banks - despite of high riskiness of this integration exactly for private institution. For example, some time ago there was a version in bank community that fate of bank "Slavianskiy", liquidated in January, was caused by its aggressive position to ferrous metallurgy. As is well known, "Severniy" complex and complex in Makeevka were in sphere of interest of notorious bank "Slavianskiy".