Metinvest Group co-owners Vadim Novinsky and Rinat Akhmetov (Photo: Metinvest)
GOK in Kryvyi Rih and Kametstal has been partially suspended from July 1 due to logistical and economic factors. This was stated by the Metinvest group.
In mid-June, Metinvest Group began the process of suspending GOK’s business in Kryvyi Rih. From 1 July [Метіневест] Production suspended at two mining and processing plants in Kryvyi Rih (Ingulets GOK and joint venture Southern GOK), and reduces the Kamyansky Kamyansky business to a single blast furnace, due to logistical factors, high production costs and lower product prices, ”- said the press service of the Metinvest Group. Production in North GOK will also be suspended from mid-July. Among the factories of the Southern GOK. Group-affiliated mining and processing in Ukraine, central GOK will continue to operate at reduced capacity.
This is a forced procedure. “Undoubtedly, the main factor is the continuation of the Russian invasion of Ukraine,” the company said.
But the situation in the country’s economy also remains difficult and tends to deteriorate due to a number of destabilizing factors that prevent companies from fully operating and planning their activities for more than a month ahead. Key factors:
- Changes in the logistics of the mining and mining complex and the high cost of transportation to the final consumer. Previously, the group transported finished products by sea. “Currently, the ports are closed, so we are forced to send products exclusively by rail. Compared to pre-war times, logistics costs have increased several times. Stocks of metal products are also piling up at all stages of the supply chain, and our finished products are waiting in line at the border with the European Union for months,” Metinvest notes.
- The high cost of manufactured metal products, which is constantly increasing due to rising energy prices, including natural gas and raw materials, and the lack of demand for metal products in the domestic market of Ukraine, which decreased by more than 2/3 compared to February.
- External factors that negatively affect the industry are the significant decrease in world prices of iron and steel, a decrease in the demand for metal products and the consumption of iron ore due to a decrease in the production of metal products at European companies.
The Metinvest Group stated that thousands of employees will be involved as much as possible in the repair and landscaping work of the above-mentioned assets while preserving core profits.
«Today, the joint task of the state and companies is to do everything in their power to make the Ukrainian economy work. Given the difficult situation and the monthly trend of deterioration, only regulatory support from the state can ensure the survival of the industry, the restoration of the functioning of the enterprises, and the restoration of the ability of the industry to maintain the economic front.”
The company explains that it is primarily about optimizing the logistics component, as well as other organizational solutions that will help the industry stay afloat.
We will recall that yesterday it became known about the intention of Ukrzaliznytsia to increase transport tariffs for all types of shipments by 70% since July 1, 2022.
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