Metinvest to shut down two blast furnaces, launch one at Azovstal

Ukraine’s largest steel producer Metinvest (METINV) is
planning to shut down blast furnaces (BFs) No. 5 (permanently) and No. 6 (for
repairs) and to launch BF No. 3 (after repairs) at its Azovstal plant (AZST
UK), according to a June 4 press release.

Metinvest has been reconstructing BF No. 3 at Azovstal
since 2017. The hot iron capacity of BF No. 3 will increase as a result of the
project by 0.5-0.8 mmt p.a. to 1.3-1.6 mmt p.a. The total CapEx, initially
expected at USD 70-75 mln, will amount to USD 145 mln, according to Metinvest’s
press release.

Metinvest did not provide the timing for the shutdowns
and the launch, saying only that the launch will happen in the near future.

Dmytro Khoroshun: We expected
BF. No. 6 (annual capacity of about 1.1 mmt of hot iron p.a.) to be shut down for two-three year repairs
after the launch of BF No. 3. However, we thought that BF No. 5 (also about 1.1
mmt p.a.) would be shut down not earlier than BF No. 6 is repaired (2021 or
later).

After the completion of the announced changes,
Azovstal will be operating three blast furnaces: No. 2 (1.1 mmt p.a.), No. 3
(1.3-1.6 mmt p.a.), and No. 4 (1.3 mmt p.a.), with a total hot iron capacity of
3.7-4.0 mmt p.a. We estimate this will allow for maximum steel production of
about 4.2-4.55 mmt p.a., or 11.5-12.5 kt per day.