Package 12 sanctions may help production of pig iron and ferroalloys in Ukraine – Kalenkov

At the same time, the package retains loopholes in the form of transition periods and extensions of the import ban

The positive aspects of the 12th package of sanctions adopted by the EU from the point of view of the Ukrainian steel industry are that the restrictions have been extended to such critical positions as pig iron and ferroalloys.

Oleksandr Kalenkov, president of the Ukrmetalurgprom association of enterprises, told GMK Center in a comment.

However, in general, it is quite difficult to unambiguously assess the 12th package of sanctions. In particular, it is of concern that a loophole for importing a number of items, including pig iron, to the EU up to March 30, 2024, «if the contracts for these items were concluded before December 19, 2023.

“IIn addition, despite the tough position of the European steel association EUROFER, which demanded an immediate halt to imports of Russian slabs and billets, the sanctions on which, as is known, were to come into force from April 2024 for some types of products and from October 2024 for others, the 12th package not only does not provide for an immediate ban on their imports, but, on the contrary, for a number of items, the start of the ban is postponed until 2028,” Kalenkov adds.

In any case, the introduction of the package gives Ukrainian steelmakers a chance to fully or partially replace imports of a number of Russian steel products with their Ukrainian counterparts.

“Ukrainian steel industry has been and remains one of the leading branches of Ukraine’s industrial complex and will continue its activities regardless of any decisions made by anyone. Given the ban on imports of a certain range of steel products from Russia, as well as from third countries where Russian steel components are used in the production of steel products, Ukrainian steel producers have an additional chance to increase the stability and scale of their participation in European technological chains by fully or partially replacing Russian products with Ukrainian ones, which we will certainly take advantage of,” the president of the Ukrmetalurgprom says.

GMK Center previously wrote how the 12th package of sanctions will affect imports of iron and steel products to the EU. The document introduces new and expands existing restrictions, closing existing loopholes for circumventing sanctions. The new bans affect steel imports from Russia, in particular pig iron and ferroalloys, which have long remained “untouchable” for inclusion in the sanctions lists. At the same time, the Europeans eased the conditions for imports of Russian slabs and alloy steel billets, lengthening the transition period.