Europeans asked not to ban the import of steel semi-finished products from Russia

Nine large companies, including European steel producers and traders, have written a letter to the European Commission asking them not to impose a ban on the import of steel semi-finished products - such as slab, bloom and square billets - from Russia. This was reported by S&P Global Commodity Insights with reference to a letter dated September 27.

The European Union imposed a ban on the import of a wide range of Russian steel products in response to the start of Russia's special military operation in Ukraine back in March. This list includes, among other things, uncoated hot-rolled and cold-rolled steel products, long products, welded and seamless pipes. But the ban does not apply to steel semi-finished products, one of the largest suppliers of which to the EU is Russia .

The potential expansion of the ban on Russian steel imports to the EU was reported by Bloomberg on September 23. In particular, Poland, Ireland, Latvia, Lithuania and Estonia are lobbying for this idea. The letter asking not to expand the ban on steel imports from Russia is a response to statements by some European manufacturers who, on the contrary, had previously asked the European Commission to impose sanctions on Russian semi-finished products, for example, in the form of duties, a source from S&P Global Commodity Insights in the steel market explained.

In the event of a ban on the import of Russian slab, which is used to make flat steel, NLMK, the only exporter of this product from Russia to the EU, would be the first to suffer. The company supplies steel semi-finished products to plants in Belgium, France and Italy, which it owns jointly with the Belgian investment fund SOGEPA, and its plant in Denmark.

RBC sent a request to the press services of the European Commission and NLMK.

Why European companies were asked not to ban Russian semi-finished products

More than 80% of imports of steel semi-finished products to the EU came from Russia and Ukraine, according to a letter from European steel producers and traders. But today it is impossible to find a replacement for Russian products due to the temporary shutdown of Ukrainian factories.

European manufacturers and steelmakers from third countries, including China , Brazil and India, would not be able to sustain the required supply of semi-finished products in terms of size and price, the letter said.

Other alternatives to Russian semi-finished products are steel producers in Iran, which are under sanctions, and several companies in North and South America, whose goods are completely bought up for the needs of the US and Mexican markets. At the same time, the construction of new facilities for the production of steel semi-finished products in Europe would take three to four years and would require large investments, market participants said.

If the European Commission bans Russian semi-finished products, the level of capacity utilization of European factories will be significantly reduced or, in the worst case, they will be completely closed, which will lead to an increase in unemployment and prices for steel products, the authors of the letter emphasize.

European steelmakers are already cutting production and laying off employees, the European Steel Manufacturers Association (Eurofer) said on September 15. The reasons are rising costs, primarily electricity costs, falling demand and cheap exports from third countries, where electricity prices are much lower than European ones, the steelmakers emphasized in their statement.