Alchevsk Steel restarts production of pig iron

Alchevsk Steel (ALMK UK), part of the Industrial Union of Donbas group, has recently restarted its production, Ukraine’s Metal Courier reported on June 4. This week, the plant relaunched one of its four blast furnaces with the aim of producing 40.5 kt of pig iron in June. Alchevsk Steel may relaunch another blast furnace in July, providing that the plant’s power supply problems are solved, the Courier reported.

Alchevsk Steel is located in the center of the occupied part of Ukraine’s Donbas region, and is thus facing logistics constraints for raw material delivery and shipment of finished products. The enterprise was fully stopped in late August 2014.

Roman Topolyuk: From the perspective of Ukraine’s top iron ore producer Metinvest (METINV), the restart of pig iron production at Alchevsk Steel provides an opportunity for more sales, particularly with a customer that is nearby, which brings higher profitability than exports. However, Alchevsk hasn’t determined the source of its raw materials yet and it’s also considering iron ore supplies from Russia, according to media reports. So far, production volumes at Alchevsk are quite low (the enterprise produced 316 kt of pig iron monthly in 2013, before the war) and don’t seem to be very sustainable, as the military conflict is ongoing.