According to media reports, the owners of one of the largest Ukrainian steelmakers, Zaporizhstal, have intensified talks to sell their metals and mining assets.
However, market players think it more possible that Metinvest would be interested in the acquisition, as it is a vertically integrated metal and mining company, but does not produce coils in Ukraine. In addition, Metinvest provides Zaporizhstal with two thirds of its iron ore needs and with more than two thirds of its coke needs. The companies have declined to comment on the issue.
Currently Zaporizhstal holds a 40% share in the domestic market of hot-rolled flat steel products and a 52% share in the local cold-rolled steel market. However, the domestic market consumes only 37% of its production and the company exports the rest of its products to around 70 countries worldwide. In 2009, Zaporizhstal finished steel production fell by 15.5% and its crude steel production dropped by 16.9% YoY to about 2.75 million tons and 3.28 million tons respectively.
Industry analysts estimate the value of the so-called Zaporizhstal holding company, including Zaporizhkoks and Zaporizhya Iron Ore, at $1.0-1.9 billion. (SteelOrbis)