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Blockade forces Mariupol steel plants to reorganize-The 19th China(Guangzhou)Int’l Metal &Metallurgy Exhibition
8/9/2017 steel expo-metal &metallurgy expo |
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Kyiev Post reported that on the night of Jan. 25, activists arrived at the Luhansk-Lisichansk railway, intent on blocking trade with enterprises in areas controlled by Russian-backed separatists. The activists began blocking trains moving cargo from Russian-occupied Luhansk and Donetsk, with organizer and Samopomich Party member of parliament Semen Semenchenko equating trade with the separatists to “terrorist financing.”
The blockade which stopped Donbas coal from going to Mariupol forced the city’s massive steel mills to reorganize, relying on overburdened railway lines to import more expensive coal from the US and, increasingly, Russia.
Russia itself has benefitted from the blockade, apart from higher sales to Ukrainian steel mills. Donetsk separatist leader Aleksandr Zakharchenko announced in March that his newly seized mines would sell the coal to Russian factories.
The central bank said in April that the blockade would cost the Ukrainian economy one percent of growth.
Azovstal is one of the country’s biggest steel mills, paired with the Ilyich factory, also in Mariupol, the Azov Sea port city of 500,000 people some 635 kilometers southeast of Kyiv.
Mr Enver Tskitishvili a gregarious ex member of parliament & director of Azovstal said that “At the start of February, our production fell by an order of 30%. We were working on the level of 40% of what was possible.”
Tskitishvili accused the activists of “wanting to inflict damage on Ukraine.”
“Why do I say “want?” Tskitishvili asked rhetorically. “Because they thought that the cargo transports would freeze, and then get stuck. The people who planned this either worked in the government or know how the government works.”
Since the blockade, Azovstal has raised its coal purchases from Russia, from 15 percent of its total to 33%. Mr Tskitishvili said that “Buying coal from Russia, whose economy do we develop? Russia’s.”
The other two thirds of Azovstal’s coal now comes from mines in the United States under billionaire oligarch Rinat Akhmetov’s control.
That hasn’t been cheap.
Ukraine went from importing steelmaking coal at USD 71 per ton in the first three months of 2016 to USD 206 per ton in the first three months of this year, according to US?Energy Department data.
That’s a leap from purchasing coal at an internationally standard price to having the third-most expensive imports in the world.
Concorde Capital Analyst Andriy Perederey said “most of this coal went from Metinvest owned US based mine United Coal for the holding’s internal use.” He added that this “reflects the internal price of Metinvest.”
-The
19th China(Guangzhou)Int’l Metal &Metallurgy Exhibition
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