Russia-origin slab, billet imports to Europe can continue until 2024 on quota basis: EC

Russian-origin imports of billet and slab into the European Union will be allowed until April and October 2024, respectively, on a quota basis, the European Commission said Oct. 6, in its eighth sanctions package against Russia for its invasion of Ukraine.

EU imports will be allowed to import a total of 3,747,905 mt of Russian slab between Oct. 7, and Sept. 30, 2023, as well as another total of 3,747,905 mt between Oct.1, 2023, and Sept. 30, 2024, according to the EC.

For Russian-origin billet, EU importers will be allowed to import 487,202 mt between Oct. 7 and Sept. 30, 2023. A further 85,260 mt of billet will be allowed between Oct. 1, 2023, and Dec. 31, 2023, and 48,720 mt of billet will be allowed January-March 2024.

The slab and billet import quota volumes set by the EC is considered close to what is needed by EU steel processors, market participants told S&P Global Commodity Insights.

Nine large companies, including European steel rerollers and traders, had previously written a joint letter addressed to the EC Sept. 27 underlining the risk “of sanctioning input materials for the rerolling business model in Europe.”

More than 80% of the EU’s steel semi-finished steel products come from Russia and Ukraine, according to the letter. Following the Russian invasion of Ukraine in late February, and as a result of previous sanctions imposed on specific Russian companies and individuals, Russian mill NLMK became the main slab supplier into the EU from the Black Sea, with some European rerollers having to source material from alternative origins.

NLMK has been focused on delivering slab to its own coil and plate rolling mills in Belgium, France, Denmark and Italy, as well as some external sales to Central European buyers.

Furthermore, imports of finished steel products that have been “processed in a third country incorporating iron and steel products originating in Russia will be allowed until September 30, 2023,” according to the EC.

However, finished steel products processed in a third country using specifically Russia-origin billet and slab products, will be allowed until April 1, 2024, and Oct. 1, 2024, respectively, in line with the timeframe set for the ban on direct imports of Russia-origin slab and billet into the EU.

In addition, for a small group of finished or semi-finished steel products that either originate in Russia or have been exported from Russia, a three-month winddown period, until Jan. 8, 2023, will be in place to allow for the execution of contracts signed before the import ban on the semi-finished steel products was adopted on Oct. 7, 2022.

The products for which Russia-origin imports are only allowed until Jan. 8, 2023, are listed in the following table:

Platts, part of S&P Global Commodity Insights, assessed CIS export billet at $525/mt FOB Black Sea on Oct. 6, unchanged from Oct. 5, amid the absence of large bookings, few Russian offer and hesitance from buyers in Turkey, the main outlet for Russian billet, sources said. The billet price range discussed by market players on Oct. 6 continued to be exceptionally wide.

The Platts weekly FOB Black Sea slab price assessment stood at $445-$455/mt Sept. 30, unchanged on week, declining 23% from $580-$590/mt at the beginning of 2022. Russian slab and flat-rolled steel exporters mainly target the Turkish market, with their slab prices lower than alternatives.

Platts, assessed import slab in Southern Europe at $600/mt CIF Italy Sept. 30, unchanged on week, but down $50/mt from Sept. 2.

— Annalisa Villa, Viral Shah, Benjamin Steven