INTERVIEW: Ukrainian steelmaker Metinvest looking for new opportunities: CEO

More than two years on from Russia's invasion of Ukraine, Metinvest, Ukraine's largest steelmaker, is getting back on its feet and looking for new opportunities, with a doubling in its exports, CEO Yuriy Ryzhenkov told S&P Global Commodity Insights in an interview ahead of the annual Federacciai meeting in Vicenza on Sept. 26.

Metinvest operations have been stabilizing after port operations resumed, with around 7 million metric tonnes of iron ore-related products shipped in the first half of 2024, up 100% compared with a year ago, when nothing was exported due to the war.

"After the restoration, the Black Sea ports are pretty much working at the normal kind of way. Of course, you still have Russian attacks once in a while, but other than that, the operations are uninterrupted, and we've been able to ship our products via seaborne route since the end of 2023," Ryzhenkov said.

The company is currently exporting between 1-1.2 MMt per month of iron ore products via seaborne routes, with the majority going to the Far East and the rest into Europe, in particular Italy and eastern European countries.

In terms of finished products steel, Metinvest had two working mills in Ukraine, namely flat steelmaker Zaporistal and long steelmaker Kametstal, with the first operating at around 75% capacity (three of four blast furnaces operating) and the second at 65%-70% capacity (three of three blast furnaces working at lower capacity).

Looking for opportunities

"We're looking at opportunities in many markets, mainly in the markets where we're already operating or in the markets which provide some sort of synergies either now or in the future with our Ukrainian operations," Ryzhenkov said.

He confirmed that Metinvest is among those interested in purchasing Polish steel plate producer Liberty Czestochowa, which is under administration.

"The Polish plate mill...is a good opportunity for Metinvest to go into European green steel production, thanks to the use of the electric arc furnace," Ryzhenkov said, adding that the Polish mill was the same as the one it previously operated at Azovstal.

"Because we know the market and the customers we can easily ramp up production at this mill to its full capacity and we can serve from there the Polish as well as the Ukrainian market that doesn't have plate production any longer," he said.

Metinvest previously supplied the Polish market with 1 MMt per year of plate from its former Mariupol mill, which was destroyed in May 2022.

Liberty Czestochowa has a 700,000 t/y EAF and 1.2 MMt/y heavy plate capacity.

Metinvest also has two plate mills in North Italy, namely Metinvest Trametal in Genoa with a design capacity of 600,000 t/y and Ferriera Valsider near Verona, which produces up to 600,000 t/y of coils and plate. Both mills used to re-roll slabs from Mariupol but now buy from the open market.

Ryzhenkov said Metinvest had also done due diligence on buying large Italian steelmaker Acciaierie d'Italia, but it was "not their priority," although it was an interesting mill.

"We are looking into it, but we do not believe it is appropriate to formalize an investment alone. We would like to get back into the game later, perhaps with an Italian partner," he said.

"I saw great opportunities in the ports, in the plant also from a green perspective, but it is a large investment, so government, unions, financial and industrial partners need to be all on board," he added.

JV with Danieli

Metinvest was already investing in a joint venture with steel and plant maker Danieli in Italy to build a mill in Piombino with a 2.3 MMt/y EAF.

Ryzhenkov said the hope was for construction to start in Q1 2025.

"At the moment, we're in the final stages of program agreement with the Italian government and the local authorities," he said. "Hopefully, we will finalize the program agreement by the end of the year."

"We are also trying to finalize the access to the land, which is owned by JSW and we are close to finalizing this agreement too," Ryzhenkov added, saying it was also working with finance providers and various governmental agencies to structure the finance portfolio.

"Again, most of those -- all of those activities are expected to be concluded by the end of the year, so that we can start to the building works by Q1 next year," he said.

DRI projects

Metinvest was also for opportunities to enter the direct reduced iron market, as it expected more demand in the future.

"It's natural to build a DRI somewhere on the Mediterranean where you will have access to both to good prices on natural gas," Ryzhenkov said.

"There are a few locations where that can be done. And we are indeed, together with Danieli, looking at those possibilities. In parallel, we are looking at a possibility of building a DRI-HBI plant at our Ukrainian facilities in conjunction with our Piombino project," he said, explaining that the EAF would be able to use scrap and DRI as raw materials.

"We also offered to be part of a private consortium made by Italian steelmakers to be the main supplier of raw materials, because we have plenty of raw materials to supply for the DRI production," he said, adding that it was waiting for a response.

Metinvest currently produces 27-30 MMt of iron ore products and can ramp up to 40 MMt of iron ore products that can be produced to DRI pellets quality.

Mentivest produces about 6 MMt/y of DRI-quality pellets per year. "Obviously, it depends on the market, whether we do or we don't produce," Ryzhenkov said.