Exclusive It is more profitable for Zaporizhstal to produce rolled products in coils compared to slabs, – Nikolayenko

The company supplies commercial slabs from Ukraine to its rolling mills in Italy and the UK

Metinvest Group was forced to start manufacturing steel products at its plants that were previously produced at facilities in temporarily occupied Mariupol. In particular, Zaporizhstal has mastered the production of slabs, which were previously produced at Ilyich Iron and Steel Works of Mariupol and Azovstal, but such production is not always economically viable.

Dmytro Nikolayenko, Metinvest’s Chief Commercial Officer, told this in an interview with FAQ Talks.

Due to the loss of steelmaking capacity in Mariupol, Metinvest’s re-rolling mills in Italy and the UK started buying slabs from external suppliers. Metinvest turned from a major seller of slabs to a major buyer, but the Group was partially able to resume production at its facilities in the non-occupied part of Ukraine.

“Our steelmakrs at Zaporizhstal and Kametstal managed to solve this rather difficult problem and started producing commercial slabs. We produce rolled slabs, not cast ones. We can produce steel at Kametstal and then roll it out at Zaporizhstal’s slabbing facility,” said Metinvest’s commercial director.

However, the question of the economic feasibility of such production remains open.

“All this has a serious impact on production costs. But we have this opportunity and we are using it – our European assets consume Zaporizhzhia slabs for a certain product mix. But in general, it is more profitable for us to sell steel coils than to produce slabs,” emphasized Dmitriy Nikolayenko.

As previously reported, back in 2023, Zaporizhstal mastered the production of slabs of various sizes from S235, S275, and S355 steel grades, which are supplied to Metinvest’s European assets, where they are used to make hot-rolled plates and coils.

In January-February of this year, Zaporizhstal produced 553.1 thousand tons of iron, 478.3 thousand tons of steel and 413.3 thousand tons of rolled products. In 2024, the company increased its rolled steel production by 18.3% y/y – to 2.4 million tons. The company produced 3.1 million tons of pig iron in the year, up 14.3% y/y, and 2.9 million tons of steel (+17.2% y/y).