Three months have passed since the start of the large-scale war waged by the Russian Federation against Ukraine, which began on February 24. SteelOrbis has collected all the available information on the major steel and raw material facilities in Ukraine, regarding their operational status, current conditions and future outlook.
Mariupol-based Azovstal and Ilyich Iron and Steel Works, owned by Metinvest Group
The operations at these facilities were suspended and they were put into preservation mode on February 24, the first day of the Russian invasion of Ukraine. Since then, Russian troops were shelling Mariupol, with around 95 percent of all buildings in the city damaged or destroyed, according to the official information of Ukrainian authorities in May. Azovstal was hit the hardest as the Russians bombed the plant with all kinds of shells, including extremely large bombs, for two months as Ukrainian defenders and civilians remained on the plant’s premises. On May 20, the Russian Ministry of Defence announced that it had brought the whole city of Mariupol and Azovstal, the last outpost of Ukrainian resistance, under control.
The head of the so-called DNR (pro-Russian separatists’ Republic of Donetsk), Denis Pushilin, said on May 18 that Azovstal will be demolished, while Ilyich Iron and Steel Works will be rebuilt, as reported by Russian media. There was less damage to the latter, though the exact damage it suffered is still unknown.
Metinvest, the owner of both plants, said more than once over the past three months that its facilities would be restored once Mariupol would return under the legal control of Ukraine. The company has already started preparations to file a lawsuit against Russia for at least $17-20 billion due to the damage and destruction done to its plants in Mariupol.
"The Mariupol plants represent more than a third of Ukraine's steel production. In other words, Ukraine has now lost about 30-40 percent of its steelmaking capacity," CEO of Metinvest, Yurii Ryzhenkov, said in March. The crude steel production of Azovstal was 4.34 million mt in 2021, while Ilyich Iron and Steel Works produced 4.26 million mt in the same year.
Azovstal was one of the major sources of slab, plate and pig iron supplied by Ukraine to the international market as well as being a large steel supplier to the local market. Ilyich Iron and Steel Works, which has the largest sinter plant in Europe, was specialized in flat steel production, including carbon HRC, CRC and HDG. In November 2019, Ilyich Iron and Steel Works completed the reconstruction of its hot strip mill 1700, increasing HRC capacity to 2.5 million mt, with further plans to reach 3.5 million mt in the future.
“Until the active stage of the Russian military aggression is stopped and reliable communication channels with the plants are re-established, it is not possible to assess its impact on the group’s plants. When such assessment becomes possible, Metinvest will provide further updates on its plans to resume their operations,” the company said in its latest production report issued on May 17.
In addition, the Russians have started to steal Ukrainian steel which was left in Mariupol. According to Russian media on May 25, a ship with 3,000 mt of Ukrainian steel was moved from Mariupol in the direction of Russia’s Rostov Port. The cargo will arrive in the coming days.
Avdiivka Coke, owned by Metinvest Group
The coke plant is the largest in Europe and based in the eastern part of Ukraine, and has been under shelling by Russia. “Avdiivka Coke has also been affected by hostilities. Some of the plant’s equipment is undergoing mothballing, while other equipment is currently being repaired,” Metinvest said on May 17. There have been more than six shellings of the plant with the last one in late May and, according to Ukrainian media, the remaining employees at the plant are expected to be evacuated due to the intensified Russian attack seen recently. On May 24, the gas supply link to the facility was damaged, according to the ex-director of the plant, Musa Magomedov.
The coke plant has a capacity of 6.4 million mt, and it is an important raw material supplier to other steelmaking plants of the group.
Zaporizhstal, partly owned by Metinvest Group
Zaporizhstal, one of the two hot rolled coil producing assets of Metivest, along with the temporarily lost Ilyich Iron and Steel Works, was taken out of hot preservation mode in early April. The company resumed operations at the sinter plant and blast furnaces Nos. 3 and 4; later, the marten and rolling mills of the asset were restarted. “We restored the production chain. It is now working at 40-50 percent of its capacity. We were forced to suspend production and were under hot conservation for almost 33 days. After the military front line was moved away from Zaporizhzhya, we received an opportunity to restart our production. … First, we restarted the sinter plant and two blast furnaces. Afterwards, we resumed the full-cycle operations. The production chain is restored and it is working at 40-50 percent of its capacity,” Oleksandr Myronenko, general director of Zaporizhstal, said.
The officials at Metinvest emphasize that the logistics and sales outlets are the key restraining factors for now. Currently, the company is working on orders, deliveries and logistics to Europe, but also underlines that there are certain developments and talks regarding sea-based transportation. Apart from HRC, Zaporizhstal is a source of pig iron for the international market.
Kamet Steel, owned by Metinvest Group
This plant is located in the city of Kamianske, Dnipro region, in central-east Ukraine. There are no Russian troops in the Dnipro region at the moment. “Kamet Steel, the group’s steelmaker in Kamianske, Ukraine, is operating using two blast furnaces following the shutdown of blast furnace No. 12 for a scheduled major overhaul,” an owner said on May 17. While all three blast furnaces were working, the capacity utilization rate of the plant reached 80 percent in March-April.
Kamet Steel was fully purchased by Metinvest in 2020. It is focused on production of billet and long steel, as well as raw materials like iron ore concentrate. Its crude steel production was 2.44 million mt in 2021. At the moment, Metinvest is trying to enlarge iron ore exports from this plant, as well as offer some volumes of billet and longs.
ArcelorMittal Kryvyi Rih
Ukraine’s ArcelorMittal Kryvyi Rih (AMKR) suspended its steel production operations on March 3 due to military threats while the mining complex continued working. Only around half a month later, AMKR decided to gradually restart some of the facilities. Around mid-April, the company resumed production at blast furnace No. 6, but postponed the restart of the Nos. 8 and 9 facilities, not yet being able to secure the needed coal supply volumes due to the blockade of sea ports. AMKR is trying to use the railways which were used for the company's exports to transport coal into Ukraine, but the process is slow and the quantities are not enough. The producer aim to work on accumulating tonnages of coal, sufficient for the restart of BF No. 8, but the expected resumption of operations at BF No. 9 will double the coal requirement, which is not yet possible to cover without sea port usage. Before the war started, AMKR was purchasing 300,000 mt coal every month. According to the latest information, the company has restarted its rolling facility No. 3 and has already produced the first 160 mt of 11 mm wire rod.
Currently, AMKR is focused on maintaining mining operations and production at 100 percent and steel output at around 50 percent. In June, according to the company’s CEO, the company plans to sell 200,000 mt of steel products and 450,000 mt of iron ore concentrate, which equals to around 70 percent of the facilities’ capacities. Later on, once the situation in the country has stabilized, AMKR will return to steel products as a key export item and overseas sales of raw materials are foreseen to decrease. The company has also been voicing the intention to return to creating added value in its operations and to invest in the development and modernization of steel production.
Dneprovsk Metallurgical Plant, owned by DCH Steel
Total crude steel capacity of the plant is 1.2 million mt, with the major products being billets, pig iron and sections. for now, only the coke facility is operational at the plant, with coke production at 12,000 mt in April. The plant is located in Dnipro city in the central-east Ukraine.
Assets at Donbass, captured by Russia after 2014
Most of the steel producing assets belonging to Ukraine and located in Donbass, but captured by Russia back in 2014, are currently operational. Although the reliable information regarding their operations is not easily accessible, the market sources continue to evaluate their production and sales actions through their own channels. Therefore, some players reported that DEMZ, a billet producer and a supplier of around 25,000-30,000 mt per month, was idle for three weeks due to lack of orders and pre-payments, but is about to restart production for a small volume. Sources report Enakievo and Makeevka, which earlier belonged to Metinvest, are working at high capacity, sending long products mainly to the Russian domestic market, while they try to sell billets for export through Russian ports, as previously. “Earlier, Donbass billet was the cheapest for export in the region, now all the Russian billet is the cheapest and the riskiest to deal with,” a trader told SteelOrbis. Alchevsk SW, a large steel producing asset, is also said to be offering its products for export, specifically steel plate.
Donetsk Metallurgical Plant (DMZ), following a two-year halt in production after being seized in 2014, announced a full-fledged relaunch in March 2021, but in reality only the operations of blast furnaces have been resumed. With supply from Ukrainian producers having been completely crippled due to Russia's invasion, offers of pig iron produced by DMZ have started to appear in the global market more often. The producer has been aiming to take advantage of the increased buying activity, though, due to the sanctions imposed by the West, it has been forced to accept prices much lower than those other alternative suppliers offered. According to estimations, the company is able to provide around 50,000 mt of merchant pig iron per month.
