Metinvest’s production may decrease by 30% due to port blockade

The closure of the ports of Great Odesa may lead to a reduction in production by the company’s enterprises in August by approximately 30%.

This was reported by “European Pravda” with reference to the company.

At the end of July, Metinvest has already suspended production at the Southern Mining and Processing Complex for approximately a month and redistributed raw materials between its enterprises. The company notes that land and Danube routes cannot replace sea exports due to limited throughput capacity and high logistics costs.

Due to the reduction in production, monthly transportation of the GOK’s products by Ukrzaliznytsia may decrease by 1.3 million tons. The situation was also complicated by the shutdown of Zaporizhstal after the Russian strike on August 11. The plant consumed about 5–6 million tons of ore per year.

In addition, the blockade of the ports has complicated the import of coking coal. The group’s metallurgical assets require about 230-250 thousand tons of this raw material every month.

Metinvest also stated that after Ukrzaliznytsia’s 30% increase in tariffs, the share of railway logistics in the cost of metal increased two to three times.

Metinvest had previously complained about the risk of new shutdowns of enterprises due to UZ tariffs.