ArcelorMittal Kryvyi Rih exports its products only to the nearest EU countries due to the cost of logistics

PJSC ArcelorMittal Kryvyi Rih, a subsidiary of the global steelmaker ArcelorMittal, can export finished products only to the nearest European countries due to the high cost of transportation. Mauro Longobardo, CEO of ArcelorMittal Kryvyi Rih, said this at the Global Perspective: Promoting Unity conference organized by the European Business Association, Metallurg newspaper reports.

According to him, for example, Poland, Romania, and the Baltic States are among the countries in question. However, European and other producers have a number of competitive advantages, including lower electricity costs and cheaper logistics.

As Mauro Longobardo explained, in the middle of this year, the company managed to reach half of the pre-war level of steel production and improve the situation with iron ore concentrate production. However, in the second half of 2024, ArcelorMittal Kryvyi Rih faced significant external and internal challenges that jeopardize the company’s ability to maintain production at the planned level, its growth and further development, and threaten to lose competitiveness.

Logistical constraints for Ukrainian industrial producers are just one of the external factors that hinder the growth of ArcelorMittal Kryvyi Rih’s production.

Longobardo also mentioned the slowdown in iron ore consumption by China. This led to a decline in global iron ore prices and limited the sales of the Kryvyi Rih-based company.

In addition, steel markets in Europe are currently stagnating. The reasons for this are geopolitical uncertainty in the region, high inflation, slowdown in construction companies, and rising energy and raw material prices.

“This creates an oversupply of ore and steel products, and a number of producers in Europe are conserving production capacity and suspending production,” said the CEO of ArcelorMittal Kryvyi Rih.

In the first quarter of 2024, ArcelorMittal Kryvyi Rih increased steel production by 93% compared to the same period in 2023, up to 278 thousand tons. During this period, rolled steel production increased by 94.1% y/y – to 262 thousand tons, pig iron production by 49.8% y/y – to 403 thousand tons, iron ore concentrate by 49.8% y/y – to 1.77 million tons, and blast furnace coke by 60.1% y/y – to 245 thousand tons.