The Ukrainian steelmaker Zaporizhstal is continuing the construction of a new pulverized coal injection (PCI) plant and intends to complete it in autumn of the current year, in order to halt its consumption of natural gas, the cost of which has increased by $60 per one thousand cubic meters.
Moreover, until the new plant is ready Zaporizhstal plans the installation of new units which will allow the reduction of natural gas consumption, and intends to use, as far as possible, alternative energy resources in its production processes.
Currently, though demand for its products is increasing and its stocks reserves are decreasing, Zaporizhstal is working at just 75-80 percent of the previous year's output levels. The producer has continued to delay increasing its output due to the still low levels of steel product prices.
Meanwhile, Zaporizhstal has reduced its expenses by UAH 10-12 million per month (approx. $1.3-1.56 million). The reduction was achieved within the scope of the memorandum of understanding signed between the Ukrainian government and the country's mining and metallurgical companies which halted the monthly increase of electricity prices, annulled the 12 percent gas price markup and froze railroad tariffs.
During the first month of 2009, Zaporizhstal decreased its finished steel production by 25 percent and its crude steel production by 27.3 percent year on year, to 222,000 mt and 266,000 mt respectively. Zaporizhstal's agglomerate production went down by 8.3 percent and its pig iron production declined by 21.5 percent year on year; the respective figures in metric tons were 397,000 and 226,000.