The European Union is preparing a fifth round of sanctions against Russia. These could further impact the steel sector on account of the proposed ban on Russian coal imports and Russian vessels arriving at EU ports.
Last month, Europe banned the import of Russian finished steel products covered by EU safeguard measures. Now, the European Commission is proposing “a ban on Russian vessels and Russian-operated vessels from accessing EU ports”, further limiting the possibility to trade ferrous products such as semis and raw materials.
President von der Leyen said this week the decision to ban coal imports from Russia into Europe is designed to cut another important revenue source for Russia, worth €4 billion ($4.4 billion) per year. According to Wood Mackenzie Europe receives some 30% of its metallurgical coal imports from Russia. A ban on imports would therefore have a direct immediate impact on prices and availability for European steelmakers, Kallanish notes.
As for thermal coal, Russian supplies represent 70% of total European coal imports, meaning that energy producers in Europe will need to find alternative sources and electricity prices could soar further.
In early March, Wood Mackenzie anticipated that “Russia would not be able to quickly make up for a loss of European [coal] demand by pivoting to Asia and China due to limited eastbound rail capacity”.
Emanuele Norsa Italy