Mauro Longobardo, CEO of ArcelorMittal Kryvyi Rih (AMKR), Ukrainian subsidiary of Luxembourg-headquartered steelmaker ArcelorMittal, has stated that the company managed to reach half of the pre-war level of steel production and improve the situation with regard to iron ore concentrate production in the middle of this year. However, he noted that the company is facing significant external and internal challenges in the second half of 2024 that hinder production growth and threaten the loss of competitiveness.
Among the main external factors are the slowdown in China’s iron ore consumption, the stagnation of the steel markets in Europe, and the logistic restrictions amid the war in Ukraine. In addition, Lonogbardo noted that due to the high transportation costs, the company can only export its finished products to the nearest European countries such as Poland, Romania and the Baltic states, where European and other manufacturers have a number of competitive advantages including lower electricity costs and cheaper logistics. Looking at the internal factors, the CEO stated mentioned the increase in electricity prices for industrial producers in Ukraine and more than a thousand open vacancies for jobs due to the war.
“Therefore, to ensure the survival of the company, we are taking a number of measures to adapt production levels to the decline in demand in our markets and the level of prices for steel products in Ukraine and globally. We continue to monitor the market situation and are ready to quickly increase production volumes if the cost of electricity in Ukraine is at least equal to the European one or if demand in the European market increases. If the situation does not change, we do not rule out optimization measures to ensure the company’s survival,” he added.