Russia still has loopholes, despite the sanctions, that allow it to export steel to the European Union (EU), as per an article carried on the GMK Center website.
Based on an interview with Yuri Ryzhenkov, CEO, Metinvest Group, carried in another publication, the GMK Center article said the steel industry in Russia is facing challenging times in terms of retaining market share. In October 2022, the EU introduced the eighth package of sanctions against Russia, including a ban on the supply of steel products to the EU.
However, the restrictions contain a loophole that gives many Russian producers a two-year reprieve to supply semi-finished products to the EU.
It is noted that European importers who buy Russian semi-finished products at low prices have an advantage over other producers in the European Union who refuse products from the Russian Federation.
Therefore, Metinvest plants in Italy and the UK are in a disadvantageous position, the CEO said. Russia is unfairly taking market share from producers such as Metinvest and other European producers, who refuse to buy from Russians because of their reluctance to sponsor the Russian economy and Ryzhenkov, hoped this loophole would be closed in the next two packages of sanctions. Metinvest is a global group of steel and mining companies with operations in Ukraine, Italy, Bulgaria, the UK and US.
According to the interview, importing opportunities of Russian steel into the EU are still open to many countries. The largest importers are traditionally companies in Belgium and Italy, which, according to Ryzhenkov, will remain so. In particular, there is a subsidiary of a Russian steel producer in Belgium.
Ryzhenkov said that by leaving this loophole, honest European producers, who do not want to sponsor aggression, were being put at a disadvantage. “The EU puts its players who want to support Ukraine in a disadvantageous position. Therefore, we believe that it would be better if this loophole was eliminated,” he noted.
He also said that Ukrainian seaports were key gateways for Metinvest’s exports. Currently, the group cannot use the sea route to deliver products, in particular to its markets in Southeast Asia and the Middle East.
As GMK Center reported earlier, Metinvest increased supplies of semi-finished products for foreign assets. In the UK, slabs are supplied by British Steel and Thyssenkrupp, in Italy, by ADI. The company has found various suppliers that can provide the required volumes.
Also, Metinvest expects to receive from Russia full compensation for damages, caused to the company’s assets due to the full-scale invasion of Ukraine by Russian troops. These funds are planned to be reinvested in Ukrainian plants and for resuming operations.
~GMK Center
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