Zaporizhstal may switch to pig iron production due to EU quotas – Metinvest COO
Zaporizhia Iron and Steel Works may shut down a significant portion of its production lines and reorient production toward larger volumes of semi-finished pig iron, which is not subject to EU quotas, Oleksandr Myronenko, Chief Operating Officer (COO) of the Metinvest Group, told Reuters in an interview.
Zaporizhia Iron and Steel Works may shift its focus to pig iron production due to new EU quotas and carbon tariffs, according to Oleksandr Myronenko, Chief Operating Officer of the Metinvest Group. Approximately 50% of the plant's capacity will become idle if they abandon higher-value-added steel products. The EU has reduced annual duty-free import quotas by nearly half, imposing a 50% duty on steel products imported above the quota.
This, along with the closure of Black Sea shipping routes and rising domestic rail transport costs, is putting pressure on the steel industry. Zaporizhstal, one of Ukraine's largest industrial enterprises, has faced seven Russian attacks, causing significant damage to production and forcing the plant to suspend operations. The company now faces a 30% increase in domestic freight rates and higher costs for importing coking coal through European ports.
Myronenko stated that the company's 15-year, $8 billion modernization plan to transition to green steel production is now considered "unrealistic" due to the ongoing war. Zaporizhstal is a crucial player in the Ukrainian market, with products in high demand both domestically and internationally.
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