Steel trade could be restricted by the raft of sanctions announced on Thursday by EU officials aimed at directly hitting Russia’s economic base following its invasion of Ukraine.
European Commission President Ursula von der Leyen confirmed on Thursday that sanctions will “target strategic sectors of the Russian economy by blocking their access to technologies and markets that are key to Russia”.
During a webinar organised by Eurometal and AMSCI, Fabrizio di Gianni from law firm Van Bael & Bellis confirmed that expectations are for sanctions to be different from the past. He explained that the target will not solely be on freezing assets, but measures will directly hit Russian economic sectors, including steel exports.
Di Gianni added that in the medium term, supply shortages from Ukraine and Russia could have an effect on future decisions on safeguard measures in Europe. Changes could be made to the system to secure the possibility of alternative supplies from other parts of the world.
An important disruption to steel trade flow from Russia and Ukraine towards the West is therefore expected, impacting global trade flow and supply of steel. The impact will come from both production and shipment stoppages in Ukraine and trade sanctions directed at Russia, Kallanish understands.
According to Eurofer numbers, in 2021 Russia exported over 3.7 million tonnes of finished steel products to Europe, while Ukraine exported over 2.5mt. These figures do not include semi-finished products, for which Europe is one of the most exposed global markets, being a large importer of slab and billet from both Russia and Ukraine.
“For the European market, the shortage of supply of iron ore from Ukraine would also be an important issue,” Metals Consulting International chief executive Alexander Siryk commented during the webinar held on Thursday. “The shortage of key supplies out of the Black Sea is going to create direct domino effects on the global steel markets.”
Emanuele Norsa Italy
