ArcelorMittal Kryvyi Rih (AMKR) can export finished products only to nearby European countries due to high transportation costs, says company chief executive Mauro Longobardo.
“In the middle of this year, the enterprise was able to reach half of the pre-war level of metallurgical production and improve the situation with iron ore concentrate mining,” he said at a conference organised by the European Business Association. “However, in the second half of 2024, AMKR faced significant external and internal challenges that threaten maintaining production at the planned level, its growth and further development, and threaten the loss of competitiveness.”
“Logistics restrictions for Ukrainian industrial producers are just one of the external factors holding back the expansion of production at our plant,” he added.
Longobardo also mentioned the slowdown in iron ore consumption by China as one of these factors, which led to a decrease in world prices for iron ore and limited the sales volumes of the Kryvyi Rih enterprise.
“European and other manufacturers have a number of competitive advantages, in particular due to the lower cost of electricity in the cost price and cheaper logistics,” Longobardo noted. “For example, we are talking about Poland, Romania and the Baltics.”
“In addition, steel markets in Europe are currently stagnating. The reasons for this are geopolitical uncertainty in the region, high inflation, a slowdown at construction companies, and rising prices for energy and raw materials,” the ceo observed. “This creates an excess of ore and steel products, and a number of producers in Europe are mothballing production capacities and suspending production.”
In July, AMKR warned that it will be forced to significantly reduce production and send approximately 1,200 employees on idle time due to new government standards for importing electricity (see Kallanish passim). On 1 June, the Ukrainian government decided the guarantee of unlimited electricity supply will only apply to those enterprises that import at least 80% of their consumption.
AMKR increased production in May due to the restart of blast furnace No.6 and coke oven batteries No.3-4 in April (see Kallanish passim). The steelmaker hiked May crude steel production by 28% on-month and 68% on-year to 208,000 tonnes. Rolled steel production rose 27% on-month and 66% on-year to 193,000t.
In the first quarter, AMKR increased steel production by 93% on-year to 278,000t and pig iron output by 49.8% to 403,000t.
Svetoslav Abrossimov Bulgaria
