Zaporizhstal's Remarkable 2024 Production Surge Amidst Unprecedented Challenges
Zaporizhstal Iron and Steel Works, one of Ukraine's largest steel producers, reported an 18.3% year-over-year increase in commercial rolled steel production for 2024, reaching 2.43 million metric tons. This impressive growth, achieved despite ongoing operational challenges, underscores the plant's ability to navigate a turbulent landscape marked by geopolitical instability, logistical disruptions, and significant resource constraints.
Key Production Metrics: Steel, Pig Iron, and Rolled Products
In addition to the growth in rolled steel, Zaporizhstal's overall steel production reached 2.89 million metric tons in 2024, a 17.2% y/y increase. Pig iron production also showed a notable rise, up 14.3% y/y, totaling 3.11 million metric tons for the year. These gains highlight the company's capacity to adapt to a difficult operating environment, driven by factors such as increased blast furnace productivity, rising demand for commercial pig iron, and the partial restoration of sea freight export routes.
The quarterly breakdown of production reflects fluctuations as the company managed various challenges:
• Pig Iron Production:
o Q1: 782.9 thousand metric tons (+61.4% y/y)
o Q2: 742 thousand metric tons (+12.3% y/y)
o Q3: 770 thousand metric tons (-0.9% y/y)
o Q4: 808.8 thousand metric tons (+1.7% y/y)
• Steel Production:
o Q1: 730.9 thousand metric tons (+85.7% y/y)
o Q2: 755.3 thousand metric tons (+20.7% y/y)
o Q3: 690.6 thousand metric tons (-5% y/y)
o Q4: 714.1 thousand metric tons (-1% y/y)
• Rolled Steel Production:
o Q1: 613.9 thousand metric tons (+88.9% y/y)
o Q2: 616.4 thousand metric tons (+19.1% y/y)
o Q3: 600.3 thousand metric tons (+0.3% y/y)
o Q4: 597.7 thousand metric tons (-2.1% y/y)
These figures illustrate Zaporizhstal's ability to maintain a relatively stable production output, despite fluctuations tied to external factors such as energy shortages and supply chain disruptions.
Challenges Faced by Zaporizhstal: Security Risks and Operational Strain
The year 2024 was fraught with significant obstacles for Zaporizhstal. The proximity of the steelworks to the frontline of conflict in Ukraine introduced constant security risks, which complicated both daily operations and long-term planning. In addition, the company faced substantial personnel shortages, partly due to mobilization efforts and migration as workers were compelled to leave the region.
The plant also experienced considerable energy supply restrictions, which disrupted its production capabilities. Moreover, the ongoing crisis in global steel markets and the stagnation of the domestic market added another layer of complexity, forcing the company to operate at an average capacity utilization of 75% for the year.
Despite these challenges, Zaporizhstal focused on improving its sustainability, operational efficiency, and competitiveness. The company emphasized finding solutions to these pressing issues as part of its long-term strategy for surviving in a difficult economic climate.
Production Growth in December 2024: A Strong Finish to the Year
In December 2024, Zaporizhstal continued to show resilience, achieving notable growth in its production metrics:
• Pig Iron: Increased by 9.7% compared to the previous month, reaching 284.7 thousand metric tons, and up 7.2% y/y.
• Steel: Increased by 8% m/m and 7.4% y/y, totaling 245.5 thousand metric tons.
• Rolled Products: Output increased significantly by 22.3% m/m and 13.4% y/y, totaling 234.1 thousand metric tons.
This strong finish to the year further emphasizes the plant's ability to overcome operational difficulties and achieve growth even in challenging conditions.
Comparison with Previous Years: A Resilient Recovery Post-Conflict Disruptions
Looking at Zaporizhstal's performance in 2023, the company increased its output by 50.6% compared to 2022, producing 7.24 million metric tons of steel products. This recovery came after a turbulent period, marked by the ongoing conflict in Ukraine, which severely impacted production levels. The plant had faced enemy shelling, interruptions in raw material and energy supplies, and disruptions to logistics routes due to the blockade of seaports.
In 2023, Zaporizhstal produced:
• Pig Iron: 2.72 million metric tons (+35.3% y/y)
• Steel: 2.47 million metric tons (+65.4% y/y)
• Rolled Products: 2.05 million metric tons (+57.2% y/y)
Despite operating at only 70% of its capacity in 2023 due to the war's impact, Zaporizhstal showed resilience in returning to production levels that were a significant recovery compared to 2022.
Looking Ahead: Navigating Uncertainty and Focusing on Sustainability
In light of the challenges faced throughout 2024, Taras Shevchenko, Acting CEO of Zaporizhstal, emphasized the company's commitment to finding solutions that would improve its long-term sustainability, efficiency, and competitiveness. Given the uncertainty surrounding the outlook for 2025, the company plans to continue its efforts to preserve the plant’s operations and safeguard its workforce, focusing on strategies that ensure the plant’s resilience and longevity despite a fluctuating market and external threats.
Zaporizhstal’s ability to increase production in 2024, even under such challenging circumstances, underscores the strength of its operations and its commitment to overcoming adversity in the steel industry. With a continued focus on efficiency and sustainability, Zaporizhstal will aim to secure its place in the global steel market, despite ongoing challenges.
