Metinvest has doubled exports from Black Sea ports and is looking for new opportunities in Europe
More than two years after the start of a full-scale war in Ukraine, Metinvest, Ukraine's largest steel producer, is back on its feet and looking for new opportunities, doubling its exports, company CEO Yuriy Ryzhenkov said in an interview with S&P Global Commodity Insights ahead of its annual meeting of the Federacciai in Vicenza on September 26.
Metinvest's export operations are stabilizing after the resumption of port operations: in the first half of 2024, about 7 million tons of iron ore products were shipped, which is 100% more than a year earlier, when nothing was exported during the wars.
“After restoration, the Black Sea ports are operating as usual. Of course, from time to time they are still attacked by Russia, but otherwise the work is going on uninterruptedly, and from the end of 2023 we can ship our products by sea,” Ryzhenkov said.
Currently Currently, the company exports from 1 to 1.2 million tons of iron ore per month via sea routes, most of which goes to the Far East, and the rest to Europe, in particular to Italy and Eastern European countries.
In terms of finished products, Metinvest still has two operating steel plants in Ukraine, namely the Zaporizhstal flat-rolled steel plant and the Kametstal long-rolled steel plant, with the former operating at around 75% capacity (three out of four operating blast furnaces), and the second at 65–70% capacity (three out of three blast furnaces were operating at lower power).
Searching for opportunities
“We are looking at opportunities at many markets, mainly in markets where we already operate, or in markets that provide some synergy either now or in the future with our Ukrainian operations,” Ryzhenkov said.
He confirmed that Metinvest is part of the number of those interested in buying the Polish steel sheet manufacturer Liberty Czestochowa, which is under management.
“The Polish sheet plant... is a good opportunity for Metinvest to enter European green steel production through the use of electric arc furnace,” - said Ryzhenkov, adding that the Polish plant is in many ways identical to the Mariupol Azovstal.
“ Since we know the market and customers, we can easily increase production at this plant to full capacity and from there we can serve as a Polish one , and the Ukrainian market, which no longer produces sheets,” he said.
Previously, Metinvest supplied 1 million tons of sheets per year to the Polish market from its former plant in Mariupol, which was destroyed in May 2022
Liberty Czestochowa has 700,000 tons per year of EAF and 1.2 million tons per year of plate steel.
Metinvest also has two sheet rolling plants in Northern Italy, namely Metinvest Trametal in Genoa with a projected capacity of 600,000 tons per year and Ferriera Valsider near Verona, which produces up to 600,000 tons per year of coils and sheets. Both plants used to roll slabs from Mariupol, but are now buying on the open market.
Ryzhenkov said Metinvest also carried out due diligence on the purchase of major Italian steel producer Acciaierie d'Italia, but that "was not their priority ", although it was an interesting plant.
" We are studying this, but do not consider it advisable to formalize the investment alone. We would like to return to the game later, perhaps with an Italian partner,” he said.
“I saw great opportunities in the ports, in the plant also from an environmental point of view, but this is a large investment, so the government, trade unions, financial and industrial partners must be on board,” he added.
JV with Italian Danieli
Metinvest has already invested in a joint venture with steel and equipment manufacturer Danieli in Italy for construction plant in Piombino with EAF capacity of 2.3 million tons per year.
Ryzhenkov said that it is hoped that construction will begin in the first quarter of 2025.
“Currently we are is in the final stages of a program agreement with the Italian government and local authorities,” he said. “Hopefully we will finalize the agreement on the program by the end of the year.”
“We are also trying to finalize access to land that belongs to JSW, and we are close to finalizing this agreement,” Ryzhenkov added, saying the company is also working with financing providers and various government agencies to structure the financial portfolio.
“Again, most of these - all of these activities are expected to be completed by the end of the year so that we can begin construction work by the first quarter of next year,” he said.
DRI projects
Metinvest was also considering entering the direct reduced iron market as it expected greater demand in the future.
“It’s natural to build DRI somewhere in the Mediterranean, where you will have access to good prices for natural resources