News Global Market EUROFER 20 March 2023
Due to the war, Europe lost about 20 million tons of steel from Ukraine
The Association of European Steel Producers (EUROFER) supports the strengthening of sanctions against the export of Russian steel products and iron ore to the EU. This was stated by the CEO of the organization Axel Eggert at a panel discussion on the future of Ukraine and Italy’s contribution to the reconstruction of the country, which took place in Milan, informs Metinvest.Media.
“I discussed sanctions on the export of Russian steel and raw materials to the EU with Ukrainian business leaders and Metinvest in particular. It concerns around 40 raw materials coming from Russia and Ukraine to the EU steel industry. We have to help,” emphasized Axel Eggert.
The CEO of EUROFER noted that the sanctions, which initially related to the export of more than 5 million tons of Russian steel products, and then to semi-finished products and iron ore, also affect the work of the association’s member companies. Under these conditions, enterprises need to find alternative resources for production. However, Axel Eggert believes that this task must be completed in order to block the flow of money to the Russian Federation and help end the war in Ukraine.
Lucia Morselli, CEO of Acciaierie d’Italia (ADI) in Taranto, a joint venture of ArcelorMittal and Invitalia, noted that due to the full-scale invasion of the Russian Federation, Europe lost about 20 million tons of steel from Ukraine. Ukrainian products in the EU were replaced by Asian products, in particular, imports from India, Korea and Japan. The embargo on Russian raw materials created problems for Italian industry. Metinvest found raw materials for the steel plant in Taranto when there was a shortage of them. ADI, in turn, supplies slabs to the group’s European plants.
“I think it was a big detriment for Europe to open up a market for steel from Asian countries that have a different cost structure, a different environmental approach, a different labour cost, especially the cost of energy. It was also a real shock for Europe,” said Lucia Morselli.
Despite the sanctions, Russia still has loopholes that allow it to export steel to the EU countries. Yuriy Ryzhenkov, CEO of Metinvest, emphasized it in an interview with the Italian publication Corriere della Sera. According to him, now the steel industry of the Russian Federation is in a difficult situation in terms of market share. In October 2022, the EU introduced the eighth package of sanctions against Russia, including a ban on the supply of steel products to the European Union. However, it provides for a two-year deferment for Russian producers regarding the supply of semi-finished products to the EU.
Yuriy Ryzhenkov also reminded that European importers who buy Russian semi-finished products at low prices have an advantage over other producers in the European Union who refuse products from the Russian Federation.
As GMK Center reported earlier, in 11 months after the start of the full-scale war in Ukraine, a number of sanctions were imposed against Russian steel industry, which make it difficult to export. However, approaches to restrictions on the part of major economies differ. The US sanctions policy, for example, provides for minimal bans, but American buyers themselves avoid products of Russian origin. The European Union left trade opportunities for raw materials from the Russian Federation and postponed restrictions on semi-finished products. The UK followed the path of introducing import duties.