Metinvest calls for seaports opening for steel exports

Ukraine’s steel industry will only recover once seaports are unblocked to enable exports, says Metinvest commercial director Dmytro Nikolayenko.

“Therefore, the group, on behalf of the entire industry, calls on the authorities, diplomats and international partners of Ukraine to make every effort to open the sea to Ukrainian steel,” he tells Forbes. “This will strengthen the economic power of the state, as it will generate around $600 million in export revenue per month and save hundreds of thousands of jobs.”

Ukraine’s steel industry has the potential to recover quickly if, in addition to the existing grain export corridor, it succeeds in opening the ports for the export of mining and steel products, Nikolayenko adds.

According to him, both of Metinvest Group’s enterprises in Mariupol – Azovstal and Ilyich Steelworks – which accounted for around 40% of Ukrainian steel production, have been destroyed and removed from Ukraine’s economy due to Russian occupation.

Ukrainian steel companies reduced crude steel production in 2022 to 6.26 million tonnes, down by 70.7% on-year.

“One of the main reasons for this drop in production can be found in issues with sales due to blocked seaborne exports,” Nikolayenko notes. “Before the full-scale war, steelmakers were shipping 80% of Ukraine’s steel to foreign countries. Some 70% of Ukraine’s steel products used to be exported through seaports, but with the outbreak of full-scale war the ports remain blocked to most exporters, except those from the agricultural sector.”

Steelmakers are looking for alternative ways to ship their products abroad and use railway and river port capacity. “However, due to a significant increase in railroad tariffs (up to 140% for ore, coal and coke, and up to 70% for ferrous metals) and additional costs for the delivery of products to EU ports, the cost of logistics has grown by four to six-fold,” the Metinvest representative says.

In January, Ukrainian authorities said they were seeking to widen the agreement on the grain export corridor to include other goods, in particular steel (see Kallanish passim).

Svetoslav Abrossimov Bulgaria