ArcelorMittal Kryvyi Rih's Impressive Production Growth in 2024
ArcelorMittal Kryvyi Rih, one of the largest steel producers in Ukraine, reported a remarkable increase in its steel production output in 2024. The company successfully ramped up its rolled steel production by 72.1%, reaching 1,534,519 metric tons in comparison to 891,438 metric tons in 2023. In addition, steel production surged by 69.9%, growing from 971,846 metric tons to 1,651,410 metric tons.
This increase in production is a testament to the plant's efforts to boost output in the face of a turbulent economic environment. AMKR also achieved significant improvements in its other production areas. Pig iron production grew by 42.7%, reaching 2,167,616 metric tons compared to 1,519,183 metric tons in the previous year.
Along with steel and pig iron, the company increased its production of coke with 6% moisture by 48.5%, totaling 1,254,743 metric tons compared to 845,068 metric tons in 2023. The production of iron ore concentrate rose by an impressive 71.7%, amounting to 7,820,682 metric tons compared to 4,555,365 metric tons the previous year. Iron ore production also saw a considerable jump, increasing by 68.3%, from 11,401,600 metric tons to 19,189,037 metric tons.
Challenges Hindering Profitability
Despite these impressive production figures, AMKR was unable to break even in 2024 due to a combination of internal and external factors. Several operational challenges have hindered the company’s ability to achieve profitability, including energy supply issues, rising energy costs, and logistical bottlenecks.
One of the significant challenges AMKR faced in 2024 was a shortage of electricity and the high cost of importing it. The company noted that the unstable energy supply, especially during periods of blackout caused by ongoing conflicts, led to the temporary shutdown of some production processes, including one blast furnace. A fire at the coke oven battery during a blackout exacerbated the situation.
Additionally, AMKR’s logistical challenges, including high transportation costs and the need to rely on costly imports for raw materials, placed further pressure on its financial performance. The company’s inability to operate at full capacity for much of the year added to the difficulties, as it could only temporarily achieve 50% utilization of its steelmaking capacity in the middle of the year.
The Ongoing Impact of the War and Market Conditions
CEO Mauro Longobardo emphasized that the ongoing war in Ukraine continues to severely affect the company’s operations. He cited various challenges, including personnel shortages, unstable energy supplies, and the devastation of key infrastructure. These issues, coupled with depressed foreign markets and weak demand for steel, have had a negative impact on AMKR’s competitiveness on the global stage.
Longobardo explained that despite significant efforts to reduce costs and optimize internal processes, the company was unable to break even due to the high cost of energy, the impact of war on the local economy, and the difficult global steel market conditions. The steel industry worldwide has also been struggling with high costs, lower demand, and volatility in raw material prices, making it even harder for AMKR to maintain profitability.
A Focus on Survival and Strategic Investments
AMKR’s focus for 2024 remained on survival, with the company making cautious forecasts about its future prospects. Despite these challenges, Longobardo reaffirmed the company’s commitment to its long-term goals and its belief in Ukraine’s recovery. AMKR’s business plan for 2025 will continue to prioritize strategic projects that ensure the company’s ability to maintain operations in difficult times.
One of the key investments for AMKR is the construction of the Third Map tailings dump, with the first phase completed in 2024. This project is critical to the plant’s long-term sustainability, as it will help manage waste produced by mining operations and support continued steel production.
The company’s long-term goal is to continue operating independently of financial assistance from the ArcelorMittal group, which has been providing support during the crisis. Despite the dire circumstances, AMKR remains resolute in its commitment to Ukraine and its belief in a future recovery for both the company and the country.
ArcelorMittal Kryvyi Rih's Role in Ukraine’s Steel Industry
AMKR remains the largest rolled steel producer in Ukraine and is a key player in the global steel market, specializing in long products such as rebar and wire rods. With a full production cycle, the company is capable of producing over 6 million metric tons of steel, more than 5 million metric tons of rolled products, and over 5.5 million metric tons of pig iron annually.
Despite the challenges it faces, AMKR continues to be a critical part of Ukraine’s industrial infrastructure. The plant not only supplies steel products to the domestic market but also serves as a major exporter of steel to international markets. The company’s continued operations are essential for maintaining Ukraine’s status as a significant global player in the steel industry.
