Ukrainian steel producer Ilyich Iron and Steel Works of Mariupol (Ilyich) is operating at 65 percent of its pre-crisis production levels, due to lack of orders and low prices for steel products, Ilyich CEO Vladimir Boyko has stated.
Currently, Ilyich is operating two of its six open hearth furnaces, four of its five blast furnaces, seven of its 12 sintering machines, and three converters.
Moreover, due to the increased price of Russian natural gas supplies, Ilyich has registered an increase in its production costs. "Whereas in 2008 the natural gas price, including delivery, was at the level of $235-240/cubic metre, currently it stands at the level of $307.7. This means that at the border the natural gas price is $246.6, excluding VAT and delivery cost. In February 2009, the natural gas will account for 15-16 percent of production costs, while a year ago it accounted for about 8-10 percent," Vladimir Boyko stated.
Meanwhile, Ilyich has reduced its natural gas consumption by 50 percent, following its 30-32 percent production cuts.
According to the preliminary data, in February 2009 Ilyich produced 208,000 mt of finished steel - up 7.2 percent, 333,000 mt of crude steel - up 28.6 percent, 278,000 mt of pig iron - up 24 percent, and 654,000 million mt of agglomerate - up 18.4 percent, all compared with January 2009.