Sanctions cut Belarus tinplate mill off from European market it was built for

EU sanctions on steel imports from Belarus are strangling the modern steel coil tinning plant in Miory, north of Belarus, built in 2020 with a view of supplying extra thin tinplate to the European market, an official at the mill told S&P Global Commodity Insights.

Miory Metal Rolling Mill, Belarus’s new and first tinplate producer, is currently in a ramp-up stage after a restart in late March-early April.

The plant initially launched in December 2020 and in the first half of 2021 made trial lots for customers in Italy, Spain, Poland and the Czech Republic, but was subsequently idled between August 2021 and April 2022 as its founder was prosecuted and the mill experienced financial difficulties, according to the official.

Miory was initially designed to supply the European market, but its emergence coincided with sanctions being placed on the country’s steel industry; in March, the EU banned the imports of steel products from Belarus and this nixed the mill’s prospects of developing sales in the market it was originally built for.

To survive, it will need to quickly develop ties with Africa, Saudi Arabia and Asia, but also mainly switch to serving Russian clients, whose recent acceptance of products from the Miory mill is due to the same package of sanctions.

When the Miory plant was at the commissioning stage, many Russian tin packaging producers that the mill’s management had contacted declined to place orders as they already had contractual relations with other foreign suppliers.

During its short period of activity in 2021, the mill developed the production of extra thin 0.1-0.12 mm tinplate most popular with can manufacturers, especially for the food and beverage industry.

In the spring, Russian can manufacturers changed their stance after Russia was hit with a range of sanctions following its invasion of Ukraine on Feb. 24 and were left without European tinplate.

S&P Global Commodity Insights estimates the Russian tinplate market at 266,400 mt/year and customs data shows its high dependence on imports from the EU, which in 2021 covered nearly half of domestic demand.

In 2021, Russia’s sole tinplate maker MMK produced 169,000 mt, according to the company, 100% of the country’s output.

Of this, 29,540 mt was exported entirely to the Commonwealth of Independent States and to Ukraine, according to Russia’s federal customs service.

Russia’s tinplate imports in 2021, at 127,000 mt, were nearly 100,000 mt greater than its exports, and all comprised less than 0.5mm thick strip. Almost 45%, or 56,130 mt, of this total came from the EU, specifically from Germany, Slovakia and the Netherlands. China supplied 26%, or 32,970 mt. Kazakhstan’s ArcelorMittal Temirtau steelworks was the third-largest source of imports at 28,000 mt, a 22% share.

“We have recently received interest from a buyer in Russia’s Far East, who was after a large quantity,” the official said, adding that certain logistical issues, including inflated rates for container shipments, make substituting European tinplate with Chinese product problematic for Russian buyers.

Originally meant to distribute up to 90% of its output in Europe, the 140,000-150,000 mt/year Miory tinning mill now envisages its sales to Russia at 9,000 mt/month, with the remainder distributed within Belarus or elsewhere.

However, the mill will soon have to deal with another sanctions-related headache: at the bare minimum it might soon need to top up process liquids in its equipment, which normally comes from Germany, but it is likely to have to source them from somewhere else.

— Ekaterina Bouckley