Ukrainian mining and steelmaking company Metinvest has a certain interest in Dunaferr, a Hungarian integrated flat steel producer that recently entered into administration, a Metinvest spokesperson confirmed to S&P Global Commodity Insights Jan. 12.
Metinvest may be the only steel company in Europe that, thanks to its proximity to Hungary and captive iron ore production, can ensure continuous operations at Dunaferr, the spokesperson said, adding that the company is closely monitoring the situation around Dunaferr.
A Hungarian municipal court issued a final and binding ruling ordering the liquidation of ISD Dunaferr to begin Jan. 5, according to the mill’s website.
Dunaferr has been idled since the third quarter of 2022, when it suspended its two blast furnaces with a combined capacity of 1.2 million mt/year due to disruptions to raw material supplies, S&P Global reported previously.
Aside from Metinvest, other potential bidders for the Hungarian mill that once belonged to Ukrainian steel group Industrial Union of Donbass, or ISD, and more recently was co-owned by Russian bank Mezhekonombank and two Ukrainian businessmen, include trading group Duferco, Liberty Steel Group and Chinese steel company Hesteel, S&P Global reported.
By acquiring a functioning steelmaking plant such as Dunaferr, Metinvest would be able to resume operations at its iron ore mining and processing plants in Kryvyi Rih, which it was forced to idle as it was no longer able to process significant iron ore tonnages within the group, or export them since access to Ukraine’s seaports remains blocked.
The war in Ukraine deprived Metinvest of its two flagship steel mills in Mariupol, where the group used to process a lot of its captive iron ore. The mills, the Ilyich and Azovstal steelworks, for their part, used to supply slab to Metinvest’s re-rolling mills outside Ukraine. To feed its plants in Bulgaria, Italy and the UK, Metinvest continues to source third-party slab, but sees this as a temporary solution as it seeks ways to return as a fully integrated steelmaking group.
— Ekaterina Bouckley
