Metinvest reduced iron ore concentrate output by 17% q/q in Q2 2024

Production of coal concentrate fell by 8% q/q, and coke – by 1% q/q

In Q2 2024, Metinvest Group reduced the production of total iron ore concentrate by 17% compared to the previous quarter – to 4.03 million tons, the company’s report says.

Output of commercial iron ore products for the period fell by 14% q/q – to 3.81 million tons, in particular concentrate – by 22% q/q, and pellets – increased by 2% q/q, up to 1.61 million tons. The results of iron and steel plants were affected by limited electricity production in Ukraine due to Russian shelling from mid-March 2024 and high demand for imported high-value electricity.

«Metinvest distributes the workload of these enterprises, taking into account the availability of electricity, its cost, market prices for iron ore products and other factors, to ensure efficient production, «the company notes.

Production of total coal concentrate for April-June 2024 decreased by 8% q/q – up to 999 thousand tons. The main factor in this was a decrease in production by 12% q/q at Pokrovsk Coal Group – to 562 thousand tons. Coke output decreased by 1% q/q – to 281 thousand tons.

The production of steel by Metinvest enterprises in Q2 increased by 22% compared to the Q1 – to 572,000 tons, pig iron – by 19% q/q, to ​​481,000 tons. The increase in indicators was facilitated by the resumption of blast furnace No. 9 at Kametstal after it was shut down for major repairs in March 2024 and an increase in the portfolio of orders for steel products, mainly in the local market.

Production of steel products increased by 8% q/q – up to 813,000 tons. At the same time, the output of semi-finished products was 209,000 tons (+26% q/q), and finished products – 604,000 tons (+3% q/q).

«In Q2, the production of commercial semi-finished products increased mainly due to the increase in the portfolio of orders for billets. The production of flat rolled products fell by 7% q/q mostly due to the unfavorable conditions of the European market, and among other factors – the use of cheaper Russian slabs by competitors. The production of long rolled products increased by 13% thanks to the increase in the portfolio of orders in Ukraine and South-Eastern Europe,» the company adds.

In H1 2024, Metinvest increased steel output by 1% y/y – to 1.04 million tons, iron ore concentrate – by 87% y/y, to 8.89 million tons, coal concentrate – reduced by 31% y/y, to 2.08 million tons. Pig iron production fell by 4% y/y – to 884 thousand tons, and coke production – by 13% y/y, to 564 thousand tons.

In general, Ukrainian enterprises of Metinvest (except those located in Mariupol and Avdiivka) continue to work with different load levels, taking into account safety factors, availability of personnel, provision of electricity supply, as well as logistical and economic factors.

As GMK Center reported earlier, in 2023, Metinvest reduced steel production by 31% compared to 2022 – to 2.025 million tons. The production of pig iron for the year amounted to 1.76 million tons, which is 36% less compared to 2022, of iron ore concentrate (total) – 11.09 million tons (+4% y/y), and coal (total) – 5.45 million t (+10% y/y).