Zaporizhstal may cut production amid logistical problems

Ukrainian flat steel producer Zaporizhstal, partially owned by Metinvest, is considering cutting production due to significant logistical problems, the company confirms to Kallanish.

“Problems with logistics have not been resolved and we have significant problems with the shipment of our products to customers in the EU,” the plant’s general director, Alexander Mironenko, said in an interview with Ukraine’s Segodnya newspaper. “All our routes before the war passed through ports, but they are inaccessible so far, and now we have a significant overstocking at the border crossings in western Ukraine. All this forces us to consider the option of reducing production, because our products simply cannot be shipped across the border.”

According to him, the company’s managers are doing everything in their power to maintain the volume of exports and the flow of foreign currency into the country. In particular, they are providing additional equipment for reloading products at the border with the EU. Together with the Cabinet of Ministers, they are also looking for ways to solve problems with logistics.

Earlier, Zaporizhstal said it plans to increase capacity utilisation to 75% in August with the launch of the third blast furnace (see Kallanish passim). The mill is currently operating at about 50% capacity with two blast furnaces in operation.

Zaporizhstal decreased crude steel production in January-May to 852,700 tonnes, down by 48.6% on-year. Pig iron output also decreased by 46.4% to 987,600t, while rolled steel production fell 46.4% to 753,800t.

In May alone, the plant reduced steel production by 59.7% on-year to 131,700t and pig iron output fell 52.6% to 157,500t. Rolled steel production was less by 56.8% to 121,200t.

At the end of March, the mill partially resumed output after previously putting all units into hot conservation mode due to the intensification of fighting following the Russian invasion of Ukraine.

Svetoslav Abrossimov Bulgaria