Metinvest needs to complete the overhaul of furnaces that started before the war — Metinvest CEO

Metinvest Group’s enterprises are currently operating at 57-75% capacity utilization, but to increase production, they need to complete the overhaul of their furnaces, which began before the full-scale war. Repairing one furnace costs up to $250 million.

This was stated by Metinvest CEO Yuriy Ryzhenkov in an interview with Forbes.

“Zaporizhstal operates three blast furnaces, which means that it is operating at 75% capacity. Kamet Steel operates two of its three furnaces: at 65%. To increase production, we need to overhaul the furnaces that were closed for repairs before the invasion. The cost of repairing one furnace is up to US$250 million. Pokrovske Coal and the Southern Iron Ore joint venture are operating at 100% capacity. As of the end of the first half of the year, iron ore assets of the Group operated at 57% of their pre-war level,” he explained.

Ryzhenkov added that the company continues to adapt its operations to the realities of wartime. In particular, in 2022-2023, the Group managed to restructure its operations and logistics, and in 2024 it will adapt to the new conditions.

The reopening of Odesa ports also helped to increase the production of iron ore.

“Traditionally, the European Union has been our priority market. But now steelmakers in the EU are cutting production, so demand for our ore has fallen. We had to increase supplies to Asia, primarily to China, and we had to significantly reduce supplies to the Gulf region due to rising costs,” said Metinvest’s CEO.

In the first half of 2024, the group’s EBITDA increased by 33% – to US$650 million compared to the same period last year. However, despite the positive dynamics, this is mainly the result of a low comparison base in 2023, when there was no access to exports via the Black Sea.

Ryzhenkov noted that the result was complicated by rising electricity and logistics costs in Ukraine, as well as falling global prices for key products.

As GMK Center reported earlier, Metinvest Group was ranked second in the top 50 largest Ukrainian investors in more than 2.5 years of wartime by NV.ua. Despite the difficult current circumstances, the top three companies on the list are exclusively Ukrainian: DTEK took the first place and MHP the third.

As GMK Center reported earlier, Metinvest’s Zaporizhzhia-based enterprises – Zaporizhstal, Zaporizhvognetryv, Zaporizhkoks and Zaporizhzhia Foundry and Mechanical Plant – paid 44% more taxes in January-June 2024 compared to the same period in 2023, up to UAH 1.4 billion.