Ilyich increases capacities, may face production difficulties in November

Ukrainian steel producer Ilyich Iron and Steel Works of Mariupol (Ilyich) has in November increased its capacity utilization level to 70 percent from 65 percent in the previous month, Ilyich CEO Vladimir Boyko has stated at his meeting with Prime Minister of Ukraine Yulia Tymoshenko in Mariupol.
 
"In October last year we registered the largest drop - of up to 30 percent. Thus, compared to the same period last year, currently we have an increase of more than two times," Mr. Boyko stated.
 
In addition, Mr. Boyko said that the reconstruction of the plant's blast furnace (BF) No. 5 is to be completed by December 15-20 this year; however, the furnace is not planned to be restarted for the time being. "We have a difficult four months ahead: November, December, January and February. Therefore, we will decide this issue according as new orders are received," Mr. Boyko added.
 
As SteelOrbis previously reported, as a result of the reconstruction in question, the volume of the BF No. 5 will increase from 2,300 m3 to 2,500 m3, with the producer again planning to achieve an output of 15,000 mt of pig iron per day. As of November 8 this year, the daily output of Ilyich's blast furnace shop has amounted to 10,669 mt. 
 
Recently, Mr. Boyko predicted that in November this year the company would face difficulties with production due to insufficient orders and underuse of capacities. At the end of October, of the 12 units at Ilyich's sintering plant only six were operating, of its five blast furnaces four were operating, and of its six open hearth furnaces only two were operating. Meanwhile, the plant's flat rolling shop No.1700 was working at 70 percent capacity, while its flat rolling shop No. 3000 was operating at 25 percent capacity.
 
Considering also the delayed value-added tax (VAT) refund from the government, the current situation of Ilyich seems to be typical also of the other steelmakers in the country. However, during the meeting held with Ilyich's workers, Prime Minister Tymoshenko said that within three weeks the government would pay back the VAT to the plant. The amount of unpaid tax in question amounts to about UAH 467 million (about $57.44 million). For June 2009 alone, the government failed to repay VAT totaling UAH 352 million (about $43.3 million) to the steel producer.