Steel: Mariupol plants suffer further damage

Metinvest’s steel plants in Mariupol have suffered further damage as a result of fighting between Ukrainian and Russian military forces. On Friday, Russian Defense Ministry representative Igor Konashenkov said that Moscow forces and units of the self-proclaimed Donetsk People’s Republic seized Metinvest’s Ilyich steel plants in Mariupol.

The state of Metinvest’s production facilities located in Mariupol, and the Avdiivka coke plant, has not changed significantly, they remain in maintenance mode. At the same time, assets in Avdiivka and Mariupol are reported to have suffered further damage as a result of the fighting. Until the active phase of Russian military aggression is stopped and reliable channels of communication with the facilities are established, it is impossible to assess its impact on the group’s businesses.

In March, Metinvest suspended production at Mariupol-based Ilyich and Azovstal following the outbreak of war, and declared force majeure.

In early April, Metinvest’s steelmaking subsidiary Zaporizhstal restarted two of its blast furnaces after a period of war-related inactivity. The plant expects to produce 65,000 tonnes of pig iron in April, rising to 150,000-170,000 tonnes in May. Production at the subsidiaries Zaporizhkoks, Zaporizhvognetriv and ZLMZ was partially restored.

In March alone, Kametstal, a subsidiary of Metinvest, was the only Ukrainian plant to produce at pre-war volumes and is now operating at around 80% of its capacity.

Metinvest’s iron ore and coal assets in Ukraine are operating at around 60% utilisation, providing sufficient raw material for Kametstal. In addition, the Pokrovskoye mine and Metinvest’s assets abroad continue to produce.

Metinvest plans to allocate 900t of steel free of charge for the production of around 80,000 units of armour for the Ukrainian army. In addition, the company has produced around 50,000 anti-tank curls and 20,000 spiked chains.

Most Ukrainian steel producers have resumed production since the beginning of April, despite the continuing war.