Under the current conditions regarding the specifics of electricity imports during martial law, the production of metallurgical products became unprofitable. This was announced by Maxim Zhuravlev, director of the procurement department of strategic raw materials and energy resources at Metinvest, during a workshop on the issue of importing electrical energy by industrial enterprises, organized by the Federation of Employers of Ukraine.
Zhuravlev noted the need for changes to the Regulations on the specifics of importing electrical energy under the legal regime of martial law in Ukraine in terms of reducing the share of imports in the consumption structure in order to avoid blackouts.
“The decision about 80% was like a “cold shower” for us. We try to plan for longer periods and plan an investment program. We factor the appropriate import standards into our energy costs. This allowed us to exist. Unfortunately, with the current standards, our production is becoming unprofitable,” said Maxim Zhuravlev.
Also, Yaroslavna Blonskaya, Marketing Director of Ferrexpo plc, during the working meeting indicated that some enterprises in the mining and metallurgical industry are considering options for forced stopping production in accordance with current regulations on the specifics of importing electricity under martial law.
“Today, with the falling prices for our products and the increase in the cost of electricity, we have found ourselves in such a situation that we have begun to think about stopping production,” - Blonskaya indicated.
According to her, Ferrexpo has already contacted the Cabinet of Ministers, specialized associations and the American Chamber of Commerce regarding changes to the “import PSO” mechanism from August 1.
As reported, metallurgical enterprises of Ukraine in May of this year increased steel production to 738 thousand tons, which is 26.5% higher than the same period in 2023 (583 thousand tons) and 3.2% more than the previous month (April, when 715 thousand tons).
In 2023, 6.228 million tons of steel were produced in Ukraine, which is 0.6% lower than the volumes for 2022. At the end of last year, the country is in 22nd place in the world ranking of steel producing countries.
