Metinvest relies on Italian mills’ restart to avoid Ukraine cutbacks

Ukrainian mining and steel group Metinvest said Tuesday if operations at its Italian plants do not normalize shortly, it will have to cut production in Ukraine.

Saleable steel production at Italian plate and coil mills Ferriera Valsider and Trametal, owned by Metinvest, will reduce production to 40,000 mt during operations downtime due to the coronavirus pandemic.

Operations at the plants are to restart April 3 unless they are subject to further restrictions by the Italian government, says Metinvest.

Semi-finished steel inventory accumulated at the mills are sufficient to ensure speedy restart of the full-fledged rolling once this is allowed by the government and justified by demand.

However, should Italian government choose to re-instate quarantine at some point after April 3 and should European steel market remain unstable, Metinvest will be forced to cut production at its Ukrainian mills too. Such a decision would affect Azovstal in the first place as the steelworks is the one in tight synergy with the Italian re-rollers whom it supplies with slab. Metinvest does not exclude temporary stoppage of slab casting at Azovstal if the situation in Italy and Europe does not improve soon.

April will be a key month for certain decisions based on the company’s order volume and market sentiment. In April, Metinvest may consider blowing down blast furnace (BF) No.3 at Azovstal and delay the restart of revamped mill’s BF No.4 until May (this was expected to come on line in April). At Ilyich steelworks, restart of BF No.4 can also be postponed till May. In case BF operations slow down, Metinvest will export any iron ore feedstock surplus, including to China, it said.

— Ekaterina Bouckley