Ukraine’s industrial sector, including the steel segment, remains under great pressure and threat due to the ongoing war waged by Russia. ArcelorMittal Kryviy Rih, one of the two key steel producing holdings in Ukraine, is working on production and export restoration and on solving the raw material supply and logistic issues. The company’s CEO, Mauro Longobardo, has shared some details in an interview with Forbes Ukraine.
AMKR is trying to secure 100 percent of mining operations and 50 percent of steel production, while the excess iron ore concentrate will be exported until the blast furnaces are restarted. In June, it is planned to export 200,000 mt of steel products and 450,000 mt of concentrate, which is around 70 percent of the mill’s capacity. Once the situation in the country is normalized, AMKR will return to its usual specialization - semi-finished and finished steel. “We are planning our work for the short run. The situation is changing frequently, so it is important to be flexible and dynamic,” CEO said.
The company has also had to change its export destinations since the absence of access to Ukraine’s ports prevents AMKR from working with most of the traditional customers from Egypt, Turkey, Israel, the Middle East, Africa and Asia. The great possibilities are now seen in the EU where import restrictions have been lifted for one year and where logistics are easier due to the existing railway connection, particularly with Poland. “International buyers are watching the news and are not sure they will receive their orders on time. Therefore, instead of direct sales we are forced to take our products to safer places, such as Poland. Then they are buying from there,” the AMKR CEO said. Another issue is that the cargoes need to be reloaded due to the difference in railroad width with Poland. Aside from the EU, the US and Canada are also considered as potential export markets, the same as the UK.
The company is now running one blast furnace out of four, being limited in coal supply. Previously, AMKR was purchasing 300,000 mt of coal monthly and Kazakhstan was one of the main sources, but now the company has to seek alternative sources and to organize railroad-based deliveries. The short-term goal is to accumulate coal volumes sufficient for the restart of blast furnace No. 8, which will increase the steel production capabilities from 30 percent to 50 percent. For now, the restart of blast furnace No. 9 is not on the table, unless it becomes possible to partly use the sea port of Odessa.