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Shipment of slabs

The justification for the lack of cost-effective alternatives is not entirely true

Metinvest has shown by its own example that there is an alternative to cheap semi-finished products from Russia for European buyers. The Group’s plants in Italy buy slabs from Italian company Adi, European companies ThyssenKrupp and Galati or American company U.S. Steel (Kosice).

Yuriy Ryzhenkov, CEO of Metinvest Group, told La Repubblica in an interview.

He explained that the rationale that steelmakers who still buy Russian slabs will have to close their plants if they refuse to use them is not entirely true.

«We are a coil (finished product) producer in Italy, we buy about a million tons of semi-finished products to produce coils at our plants, but not a single ton comes from Russia. We buy slabs both in Italy, from Adi in Taranto, and from other European producers such as ThyssenKrupp, Galati or the American U.S. Steel in Kosice. And on the foreign market, also in China and Brazil. And it is still profitable,» he said.

Ryzhenkov is convinced that it is nonsense for Italy, which opposes Russian aggression, to buy steel from Russia.

«By the way, buying semi-finished products from Russia at lower prices means competing with plants in Piombino and Taranto that produce similar products. «Metinvest buys slabs from Taranto. We know that the Italian government is doing everything it can to make this site profitable. Therefore, it is not clear why other Italian steelmakers should buy slabs from Russia,» he said.

As a reminder, Metinvest has committed to building a new green steel plant in Piombino as part of a program agreement with the Italian Minister of Economic Development. If the agreement is finalized by the middle of this year, the company will be able to start construction of the plant in late 2024, which will take 2-3 years. The Piombino plant will become a pilot project for Metinvest’s future investments in Ukraine when post-war reconstruction begins.

As GMK Center reported earlier, in the 12th package of sanctions adopted at the end of 2023, the EU introduced new restrictions and expanded existing ones on Russian steel and mining products. In particular, the ban on imports of pig iron, mirror iron and direct reduced iron (DRI) from Russia was extended.

At the same time, the bloc extended quotas on Russian slabs for another four years. In particular, the total quota for imports of these products from October 2024 to September 2028 is set at 8.5 million tons with a more detailed breakdown by period. The previous sanctions on slab imports were imposed in October 2022 (as part of the 8th sanctions package), when it was decided that they could last until the end of September 2024. Thus, the 12th sanctions package actually eased the previously imposed restrictions.