Russians selling Ukrainian steel originally destined for Italy, UK: Metinvest

Ukrainian integrated steelmaker Metinvest said July 22 that stocks of steel held at its bombarded Azovstal works in Mariupol – in addition to material held at other plants and ports in Ukraine – have been appropriated and are being sold by Russian interests.

According to details shared by Metinvest CEO Yuriy Ryzhenkov with the BBC in an interview and later confirmed by the steelmaker to S&P Global Commodity Insights, the stocks of steel had been destined for buyers including in the UK and Italy, and some of the stocks had already been paid for by the original buyers.

The steel is now being transferred to Russia and sold on, possibly to Africa and Asia, according to Ryzhenkov, who estimated the value of the steel appropriated at some $600 million.

Azovstal, which produced 4.34 million mt crude steel in 2021, was a significant exporter of steel to Europe before Russia's invasion of Ukraine Feb. 24. Typically some 87% of the works' output has been exported, with nearly half of the total sales destined for Europe, a company spokesperson said.

The works' products include continuously cast slabs, rolled plates, bars and shapes and rails.

Azovstal steel has been used in well-known constructions including The Shard in London, and the San Giorgio Bridge in the Italian city of Genoa, according to the spokesperson.

Russia declared it had taken full control of the port city of Mariupol and the Azovstal steel plant in late May.

The government of the Russian Federation's press service and information department did not immediately respond to S&P Global's requests for clarification on the steel stocks July 22.

Steel for war effort

Despite being dogged by logistics problems, Metinvest continues to produce steel at its Zaporizhstal works in Ukraine, which has been running at 50% capacity since operations restarted in April.

Zaporizhstal produced 922,300 mt of steel from January through June, down 53.6% on year. Metinvest is to take some blast furnace capacity out of production at its Kamet Steel plant in Kamianske, and has also reduced its iron ore production, the company said earlier this month.

The company is contributing to the Ukrainian war effort by making bulletproof vests and steel for underground bunkers and armored vehicles, and will contribute steel to the eventual reconstruction of Mariupol, Ryzhenkov told the BBC.

Platts' daily CIS export billet price was assessed at $535/mt FOB Black Sea July 22, down $10 from July 21, according to data from S&P Global.

Trader sources said prices were in a clear downtrend. One said that Moroccan buyers were targeting $670/mt CFR for Turkish-origin billet, with no interest in Russian material.