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Ukrainian mining and steelmaking company Metinvest said April 7 it is partly resuming operations at Zaporizhstal iron and steel works, the Group's JV where it holds 49.99% stake and aims to reach 150,000 mt output next month.
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Coil producer Zaporizhstal in the city of Zaporizhia, south Ukraine, put in hot conservation mode early March, shortly after Russia's invasion of Ukraine, is blowing in two of its four blast furnaces Nos. 3 and 4, and partially restarted the sinter plant.
"We are expecting first hot metal by the end of this week," Metinvest CEO Yuriy Ryzhenkov told S&P Global Commodity Insights in an interview April 7.
This month, the mill will restart one of its two steelmaking furnaces – the twin-hearth furnace. "In April, the mill targets at least 20,000-30,000 mt crude steel output aiming to ramp up production to 150,000 mt in May, when it will be operating both [twin-hearth and open-hearth] furnaces," said Ryzhenkov.
Metinvest did not specify who are the other Zaporizhstal stakeholder(s) and the information is also not available on their website.
Zaporizhstal aims to start rolling almost immediately after it gets first steel, and envisages the majority of its initial sales to be made domestically.
"It could sell a good amount in Ukraine domestically as a few metal end-users, including producers of formed sections and welded pipes, are restarting operations too," said Ryzhenkov. He added that overall Metinvest no longer sees CIS – especially Russia and Belarus – as countries where it can sell steel even in the future. The company used to distribute up to around 1 million mt/year in the CIS/Eurasian Economic Union.
In 2021, Zaporizhstal made 4.4 million mt of hot metal, 3.9 million mt of crude steel converted into 3.3 million mt of rolled products.
The military conflict, the forced stoppages of Mariupol-based Azovstal and Ilyich Steel reduced the presence of Metinvest on the world steel market from over 11 million mt/year (not including Zaporizhstal JV sales) to 2.5 million mt/year provided by billet and long rolled steel producer Kamet Steel – formerly known as Dneprovsky Iron & Steel Works, or DMK – in Kamianske of Ukraine's Dnipropetrovsk region, and company's re-rolling mills outside Ukraine – in Bulgaria, Italy and the UK. Azovstal and Ilyich Iron and Steel Works will remain idled for until it is safe to restart them, although Metinvest also stresses it does not know for sure how the war has affected the mills' properties.
To sustain steelmaking in Kamianske, Metinvest relies on coke made from domestically sourced coal from own mines. The company is currently not shipping in coking coal from its fully operational US mine and is selling its output in the open market.
Iron ore concentrate and pellets continue to be Metinvest's key export products sold to third parties in the current circumstances. "We are limited to around 1 million mt/month we can ship out of Ukraine. The entire volume goes to the EU by rail," said Ryzhenkov.
To deliver iron ore across the border, Metinvest has to either reload cargo to different rail cars, or change wheel bogies at border stations due to differences in rail gauges between Ukraine and neighboring Central European countries.
"Also, Ukrainian railways and border crossings are very congested these days as the majority of consignors, including wheat and corn farmers, are also using the same rail routes, as like us they can no longer export by sea. The railway infrastructure was not designed to withstand such intense traffic," he said adding Ukraine's railway operator Ukrzaliznytsia is undertaking efforts to debottleneck particularly busy routes.
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