Zaporizhstal continuing to operate at 50% of capacity, experiencing logistical problems - CEO

MOSCOW. June 27 (Interfax) - The Zaporizhstal metallurgical plant operated by Metinvest is continuing to operate at 50% of its capacity after partially resuming production, Ukrainian media have reported with reference to Zaporizhstal CEO Oleksandr Myronenko's interview with segodnya.ua.

Zaporizhstal is currently experiencing logistical problems, i.e. supplies with feedstock and the shipment of finished products, Myronenko said.

Due to significant logistical problems and overburdened railway border crossings, metallurgical businesses in Zaporizhzhya have to consider output reduction, he said.

"Logistical problems have not been resolved. We have significant problems with shipping our products to EU customers. All of our routes before [February 24] passed through ports, but they are inaccessible now. We have a glut at border crossing points in western Ukraine. All of this prompts us to consider an output reduction, because our products just can't be shipped across the border," Myronenko said.

Zaporizhstal managers are doing all they can to maintain the volumes of exports and foreign exchange inflow to the country, in particular, providing the plant's own equipment to reload its products at the border with the EU, Myronenko said. In addition, along with the Cabinet of Ministers, they are exploring ways to resolve logistical problems, he said.

Other Ukrainian businesses have earlier mentioned logistical problems, as well.

As reported earlier, Zaporizhstal reduced the output of rolled products by 46.4% to 753,800 tonnes, crude steel by 48.6% to 852,700 tonnes, and pig iron by 46.4% to 987,600 tonnes in the first five months of 2022 year-on-year.

Zaporizhstal is one of the largest industrial enterprises in Ukraine, whose products are in demand both on the domestic market and foreign markets. It produces hot-rolled steel coil, hot-rolled sheet, cold-rolled sheet, cold-rolled coil made of carbon and low-alloy steels, as well as steel strip, black tin, and bent profile.

The products are mostly supplied to manufacturers of welded pipes, cars, road and agricultural machinery, and household appliances.

Zaporizhstal is in the process of integration into Metinvest Group, owned by System Capital Management with 71.24% and Smart Holding Group with 23.76%.

Metinvest Holding is the management company of Metinvest Group.

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