Ukrainian steel producers are currently facing difficulties in selling their steel products and have problems securing coke and iron ore, which force them to cut their outputs and may even oblige them to halt operations of units, Interfax-Ukraine news agency has reported, citing Vasily Kharakhulakh, general director of the Ukrainian association of metal producers Metallurgprom.
According to Mr. Kharakhulakh, despite cuts in steel product outputs, Ukrainian steelmakers face shortages of coke. "As of today, provisions of coke are incomplete - the shortage amounts to 67,000 mt," he stated, adding that imports of coking coal from Russia have also dropped due to the accident at the Raspadskaya mine.
Accordingly, domestic steel producers are interested in purchases of iron ore with high iron content, whereas the Ukrainian raw materials are of poorer quality. "The disagreement as regards iron ore price estimates is the main cause of interruptions of supplies, mainly at Zaporizhstal and Ilyich Iron and Steel Works of Mariupol," he said.
"In general, from the beginning of the current year, the sector has been operating at a loss, but on the results of the current month the situation will get worse," Mr. Kharakhulakh said.
According to the official, the lack of working capital at Ukraine's steelmaking companies amounts to UAH 18 billion (about $2.27 billion). A most difficult situation due to lack of working capital is currently seen at Zaporizhstal, Ilyich, ArcelorMittal Kriviy Rih, Dnepropetrovsk Iron and Steel Works named after Petrovsky, Dneprospetsstal, and others.