Two-thirds of Metinvest’s products exports are carried out through ports – COO

Metinvest Group currently exports two-thirds of its products through sea ports. Only 25-30% of exports go directly by rail to other countries, said the company’s operations director Oleksandr Myronenko in an interview with Germany’s largest daily newspaper Suddeutsche Zeitug.

The opening of the sea corridor for cargoes of the mining and metallurgical complex has significantly improved the prospects for the industry.

«Previously, our enterprises worked at 35-40% capacity, as we could only export by rail overland to Romania. Now, two-thirds of exports again go through the Black Sea ports of Ukraine, and mining enterprises are operating at 80% capacity,» Oleksandr Myronenko comments.

At the same time, at the beginning of the full-scale invasion, the company had significant problems with the shipment of products.

«At the beginning of the war, we had delays of 45 or even 60 days. However, in general, the railway system of Ukraine is very well designed: in Soviet times, much more industrial enterprises transported goods by rail. Of course, our transportation is now in third place after passenger and military. But in fact, restrictions arise only when the Russians attack one or another railway bridge. We have no particular problems with delivery times. If the transportation takes 10-15 hours longer, it is not a big problem,» he added.

Although the export situation has improved with the opening of sea lanes, Russian forces regularly strike at maritime infrastructure and cargo ships, which negatively affects insurance rates and the cost of logistics.

We would like to remind you that it is becoming more and more difficult for Ukrainian iron and steel companies to compete on global markets, in particular, due to increased logistics costs, problems with energy supply and an increase in electricity tariffs.

In particular, Ukrainian Railways intends to increase tariffs for the transportation of ore and coal by rail by 19%, coke – by 12%, and grain cargoes – by 11% (including increases for freight and empty flights). Logistics now accounts for 40% of Metinvest’s production cost, so another increase in the railway tariff will reduce its competitiveness.

In addition, the government recently amended Clause 6 «Regulations on the peculiarities of the import of electricity in the conditions of the legal regime of martial law in Ukraine», by which Ukrainian producers were obliged to buy at least 80% of electricity in the EU at the European price in order to avoid forced restrictions electricity supply These factors significantly affect the competitiveness of Ukrainian metallurgy, and reduce the export capabilities of producers, which leads to a decrease in foreign currency inflows to the country.