“Russian Steel Production and EU Sanctions: Potential for Ukrainian MMC Growth”

“According to the Worldsteel association, steel production in the Russian Federation in 2022 decreased by 7.2% to 71.5 million tons. But the fall in production and exports did not meet the expectations of the countries that imposed sanctions: in the first half of last year, market participants predicted a reduction production by about 15% Worldsteel in April last year expected a fall in steel consumption in Russia by 20%, but in October it improved its forecast to a decrease of 6% .7 million tons.

Europe has almost reached the physical limit of the possibility of imposing new sanctions, so further restrictions can only clarify or increase the responsibility for circumventing previously imposed bans, analysts point out.

For example, already existing restrictions contain a loophole that gives many Russian manufacturers a two-year delay in supplying semi-finished products to the EU, and it should be abolished.

“The Association of European Steel Producers EUROFER supports the tightening of sanctions against the export of Russian metallurgical products and iron ore raw materials to the EU. Under the current conditions, it is important to create conditions so that the products of the Ukrainian mining and metallurgical complex can gradually replace similar Russian products on the European market. Due to the replacement of Russian suppliers, Ukraine can grow production of MMC by $74 million. The maximum possible potential for increasing the export of iron ore and pig iron, according to our calculations, is $230 million per month. This is provided that metallurgical enterprises can resume production to pre-war levels,” the publication sums up.

Recall that earlier First Deputy Prime Minister – Minister of Economy Yulia Sviridenko said that Ukraine is interested in replacing Russian metal and metallurgical products on the European market: this is important for the further sustainable development of the pan-European metallurgical complex.