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The Associated Press assessed the situation in Zaporizhstal during the war

Photo: Zaporizhstal

The steel giant has been unable to return to normal production levels due to power outages, infrastructure damage and blockages at Black Sea ports.

Blocked ports do not allow Ukrainian industrial enterprises to continue production. They were forced to reduce the geography of their customers. The Associated Press reported this after visiting the Zaporizhstal plant of the Metinvest group in Zaporozhye.

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“Before the war, metallurgy was the mainstay of the economy and accounted for a third of Ukraine’s exports. But this trend was destroyed by Russian troops, who took control of the industrial centers in regions of Donetsk and Luhansk. Because of the war, the plant does not work at full capacity, a third of more than 10 thousand workers are idle”, the article said.

It is indicated that Zaporizhstal, like many industrial enterprises in Ukraine, is prevented from returning to normal production levels by the loss of electricity as a result of the Russian missile attack, damage to the infrastructure and blockage of ports on the Black Sea.

“It is the blockade that is one of the biggest problems for Zaporizhstal, whose work has been interrupted only twice in its almost 90-year history – during World War II and shortly after the Russian invasion of Ukraine. Instead of ship, orders are transported mainly by rail, which increases the cost not only of transportation, but also of production and raw materials,” the agency explained.

So, before the war, the plant could collect a batch of steel billets, used, for example, for the manufacture of refrigerators and deliver them to customers in a month or two. But because of the blockade of the ports, everything changed.

“Today the delivery can take three months or more. Not all clients are ready for such risks. Therefore, we were forced to reduce the geography of our clients,” said Roman Slobodyanyuk, general director of Zaporizhstal.

Previously, Zaporizhstal worked with customers in almost 60 countries, now they are divided. The war had an impact on the mill’s ability to fulfill orders for many African countries and most Middle Eastern countries. After all, before the war, about 90% of metallurgical products were exported by sea, because it was cheaper.

“Now the plant is focused on the nearest European countries and the US market, where products can be delivered through Polish ports. At the same time, the Ukrainian KSE Institute has calculated that the losses of the Ukrainian business as a result of the war reaches $ 13 billion. In 2022, production will decrease by almost a third, and this year the Ministry of Economy predicts growth of only 1%. According to Mr. Ryzhenkov (Yuri Ryzhenkov, CEO of Metinvest – ed.), the continuation of supply chains, primarily the unblocking of Black Sea ports, will revive the company,” the agency concluded.

Earlier, Metinvest said that Russia continues to import the metal in evasion of sanctions. The aggressor country uses loopholes in sanctions and takes market shares away from European manufacturers.

Also recently, a study was published, according to which the unblocking of ports would give Ukraine 10% of GDP. At the same time, while Ukraine lost more than 60% of trade due to the blockade of ports, Russia managed to increase it by the end of 2022.

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Source: korrespondent

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