Metinvest reduces use of its facilities by more than 40%
MOSCOW. June 8 (Interfax) - The Metinvest mining and metallurgical group has reduced the use of its production facilities by more than 40% due to damage, logistic problems and other restrictions caused by the situation in Ukraine, Metinvest General Director Yuryi Ryzhenkov said in his virtual speech at the Steel Success Strategies 2022 conference in the United States.
According to Ukrainian media outlets, the facilities are being used at 23% at the Northern Iron Ore Dressing Works, 83% at the Central Iron Ore Dressing Works, 32% at the Ingulets Iron Ore Dressing Works, and 24% at the Southern Iron Ore Dressing Works. The exports from these enterprises are limited by logistics.
Ilyich Iron and Steel Works and Azovstal are ruined and out of work. The facilities are being used at 54% at Zaporizhstal, 74% at Kametstal, 75% in Europe, and 100% at Unisteel.
As for coke plants, Avdiivka Coke and Chemical Plant is idle, Zaporizhcoke is running at 89% capacity, Dnipro Coke and Chemical Plant operates at 97% and Yuzhcoke facilities are being used at 98%. In terms of coalmines, Metinvest Pokrovskugol is running at 100% of its capacity and facilities of UCC (the U.S.) are being used at 86%. There are logistic restrictions on coal shipments to the plants, as well as an outflow of workforce and a deficit of miners at Metinvest Pokrovskugol.
"A decline in production has significantly changed the portfolio of metal products and sales, which refocused from remote markets to Central and Eastern Europe. Metinvest is repairing supply chains," Yuryi Ryzhenkov said.
The EU market heavily depends on imports from Ukraine and Russia, and is likely to be harmed by the crisis the most, Ryzhenkov said. The rerouting of supplies and the technological re-balancing of steel production leads to another spike in prices on key commodities, while market prices are already high. Market prices on most commodities, such as coal, iron ore, materials and metal, soared after the conflict began. That happened when the pre-crisis prices already reached their peak due to the fast recovery from the Covid-19 pandemic, he said.
The CEO believes that a new market balance may increase the metal tonne cost by up to $100 for European market participants. In addition, the growing energy prices, including prices on gas, coal and electricity, remain a factor.
Metinvest is a vertically integrated mining group managing assets in every link of the production chain from iron ore and coal mining and coke production to the production of semi-finished products and final products from steel, pipes and coils, as well as the production of other high value-added products. The group consists of mining and metallurgical enterprises located in Ukraine, Europe and the U.S. and has a sales network covering all key global markets.
The primary shareholders of Metinvest are SCM Group (71.24%) and Smart Holding (23.76%) that jointly manage the company.
Metinvest Holding LLC is the management company of Metinvest Group.