[Ferro-Alloys.com] Ukrainian mining and steelmaking group Metinvest has lowered its 2019 steel production outlook by 500,000 mt, due to the overall "difficult" market conditions, CEO Yyriy Ryzhenkov said.
"Demand for steel is at the bottom of a downturn cycle and we do hope for a recovery that nevertheless we don't see coming yet. Prices for finished steel products are likely to rebound but not before Q1-Q2 while, regarding iron ore prices, I think prices will continue to stay in the range they are now," Ryzhenkov added.
Ryzhenkov said that the company now expects to raise steel production at its Ilyich steel works by only around 500,000 mt this year, instead of the 1 million mt previously projected. In addition, it expects to produce around 8 million mt this year at both of its Mariupol works.
Metinvest, the world's 10th largest iron ore producer, is expected to produce 1 million mt more of total iron ore concentrate in 2019, or around 29 million mt in total. The company uses around 8 million mt of iron ore internally, with 5 million mt for its partners and the rest sold to third parties.
Ryzhenkov said he is in discussions with the Ukrainian government on a new law that, if confirmed, would likely increase the tax burden on the company's iron ore production fivefold, in a move that could hurt its margins.
"We believe we will find a reasonable agreement," Ryzhenkov said. (S&P Global Platts)
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