For the first time ArcelorMittal Kriviy Rih will not be able to fulfill its obligations to the state and its employees because of the increase of the Ukrzaliznytsia tariffs.
“The state determines railroad transportation tariffs and we have to obey. Buy we can’t guarantee to keep our output on the same level. Even though we did promise this when we bought Krivorozhstal, and we have always fulfilled our investment obligations”, said the company deputy CEO Vladimir Tkachenko.
“According to our calculations, after the first tariff increase we will lose 20-30% on our products. Iron ore raw materials transportation would cost us 1 million UAH daily. With iron ore raw materials we’re working on the brink of profitability, while with rolled metal we’re profitless. We don’t know how long we could accumulate such losses”, added the company deputy CEO.
AMKR exports some 20% of its iron ore raw materials, and consumes the rest. Rolled metal goes to foreign markets, where prices have reached their 12-years minimums. So the increase of the transportation tariffs would further worsen export positions of the works.
“We hope the decision will be taken not in favor of a single enterprise, however important it could be to the state. We are not against Ukrzaliznytsia, but we want this decision to be measured and taken in favor of the entire economy”, said Tkachenko. (Ukrainian metal)