ArcelorMittal Kryvyi Rih hopes to double production in H1 2023 to 50% of capacity.

PJSC ArcelorMittal Kryvyi Rih (AMKR) hopes for an improvement in the situation with power supply in the first half of this year and an increase in production from the current 25% to 50% of the plant's capacity, CEO Mauro Longobardo has said.

"We can't produce more than 25% because we don't have enough power. As soon as we have power, we can increase production... and reach 50%," he said on the sidelines of a business forum on the rapid restoration of Ukraine in Luxembourg organized by the Ukraine-Luxembourg Business Club.

Longobardo said that the facility is currently operating at 25% in ore mining and steel production and consumes about 125 MW, compared to the pre-war typical consumption level of about 450 MW.

The CEO also added that after the recent decision of the government, AMKR started importing electricity and is currently quite satisfied with the result, although the price of imports adds a negative impact on the cost.

According to him, despite this, the entire team of 26,000 employees has been retained, of which about 10,000-12,000 are employed at work, depending on the day, but assistance is also provided to others. "We are investing in keeping all of our people through this year," the CEO said.

He said that if there is sufficient power supply, further restrictions of 50% of capacity are already related to logistics. As Longobardo said, AMKR is actively developing new routes alternative to the pre-war maritime ones, and preliminary new directions to Poland and southern Ukraine will ensure 50% of production work.

"We just need to test them when we have 50% in stock," the CEO added.

According to him, without the resumption of operation of the main ports of Ukraine, the plant will not be able to either export products or ensure coal imports. Longobardo said that AMKR is currently operating entirely on Ukrainian coal, as the operation of the traditional coal import route from Kazakhstan from another ArcelorMittal's subsidiary is currently interrupted.

At the same time, he said that there are other obstacles on the way to increasing production up to 50%. First, Longobardo explained, the power supply must be reliable, since the enterprise has three blast furnaces, of which one is still working. Going to 50% would mean running two furnaces, as the third is the largest, and shutting down the furnaces abruptly in the event of power problems is fraught with damage.

The CEO called the growth of costs and logistics costs the second important problem. "The cost has already been killed. When I tell you that logistics is possible, it's true. But it's $100 per tonne more than what I paid before," Longobardo said.

He said that earlier the transport distance to the port of Mykolaiv was 250 km, there were also river deliveries, while now it is 1,500 km to Gdansk and there are also transshipment costs due to different gauges in Ukraine and Europe.

ArcelorMittal Kryvyi Rih is the largest producer of rolled steel in Ukraine. It specializes in the production of long products, in particular rebar and wire rod.

Tags: #plans #amkr