Sep 22, 2022
Europe could soon ban semi-finished steel imports from Russia – sources

The European Commission is finally considering a direct ban on imports of semi-finished steel products from Russia, in response to its unprovoked invasion of Ukraine, several sources told Fastmarkets this week.

The move would follow on from the ban on finished steel imports from Russia adopted by the European authorities in March this year.

“There is discussion about the new package of sanctions. It’s highly possible that the way for Russian semi-finished products to Europe will be closed,” Yuriy Ryzhenkov, the chief executive officer of Ukraine’s Metinvest, told local media organizations this week.

“We had expected semi-finished steel imports to be banned in one of the first packages of sanctions [to be applied against Russia], because this counts as direct financing of the aggressor’s economy and secondly as anti-competitive actions against those who cannot buy Russian raw materials,” he said.

The move would have a significant impact on the slab market because Russia is of the main suppliers to Europe.

Russia’s Novolipetsk Iron & Steel Works (NLMK) sidestepped existing sanctions by exporting slab to its own subsidiaries in Europe and beyond.

In 2021, Russia supplied 3.8 million tonnes of slab to Europe, according to International Steel Statistical Bureau, while steel billet shipments to the region totaled 515,969 tonnes.

And NLMK remains one of the main suppliers of slab to Europe because the company is still not subject to any personal sanctions against any of its directors.

In 2021 alone, NLMK supplied 1.17 million tonnes of slab to NLMK Belgium Holdings (NBH), which includes steel plate producers NLMK Clabecq (Belguim),NLMK Verona (Italy) and flat steel producers NLMK La Louviere (Belgium) and NLMK Strasbourg (France), according to the latest company report.

NLMK also shipped a combined total of 1.96 million tonnes of slab to NLMK Dansteel (Denmark) and the company’s US assets in 2021, with no clear breakdown of the total given.

In the first half of 2022 the company supplied 1.89 million tonnes of slab to its group companies outside Russia.

“There is too much Russian slab arriving to Europe for NLMK assets,” a competitor re-roller said, adding that the import ban was possible.

A source previously told Fastmarkets that while NLMK was mainly supplying slab to its own assets in Europe, it was also making deliveries to some Italian steel plate producers at competitive prices.

The source said NLMK had been preparing for a potential import ban on semi-finished steel since the spring and that his company was looking for alternative suppliers along with other European re-rollers.

A European distributor told Fastmarkets he believed the ban on semi-finished steel imports from Russia will eventually be implemented and this will push up prices for steel plate in Europe, or at the very least keep them stable.

The situation in the slab market is crucial for European platemakers, especially in the South of Europe as they are main importers of the Russian product.