We continue to monitor the impact of the Russian invasion of Ukraine on steel prices (and other commodities).In this regard, the European Commission, the executive body of the European Union, on March 15 imposed an import ban on Russian steel products currently subject to safeguard measures.
The European Commission said the restrictions would cost Russia 3.3 billion euros ($3.62 billion) in lost export earnings.They are also part of the fourth set of sanctions the EU has imposed on the country.The sanctions came after Russia began its invasion of Ukraine in February.
”The increased import quota will be allocated to other third countries for compensation,” a statement from the European Commission said.
The EU’s quota for Russian steel imports in the first quarter of 2022 totaled 992,499 metric tons.The European Commission said the quota includes hot rolled coil, electrical steel, plate, commercial bar, rebar, wire rod, rail and welded pipe.
European Commission President Ursula von der Leyen initially announced on March 11 plans to ban imports of “critical” steel from Russia into the EU’s 27 member states.
”This will strike at a core sector of the Russian system, deprive it of billions in export earnings, and ensure that our citizens do not finance Putin’s wars,” Von der Leyen said in a statement at the time.
As countries announce new sanctions and trade restrictions on Russia, the MetalMiner team will continue to analyze all relevant developments in the MetalMiner weekly newsletter.
The new sanctions did not cause concern among traders.They had already started avoiding Russian steel in January and early February amid concerns over Russian aggression and potential sanctions.
In the past two weeks, Nordic mills have offered HRC at around 1,300 euros ($1,420) a tonne exw, trading in some cases, a trader said.
However, he cautioned that there are no firm dates for both rollover and delivery.Also, there is no deterministic availability.
Southeast Asian mills are currently offering HRC at US$1,360-1,380 per metric ton cfr Europe, the trader said.Prices last week were $1,200-1,220 due to higher shipping rates.
Freight rates in the region are now around $200 a metric ton, up from $160-170 last week.Fewer European exports mean ships returning to Southeast Asia are nearly empty.
For more analysis of recent developments in the metals industry, download the latest Monthly Metals Index (MMI) report.
On February 25, the EU also imposed sanctions on Novorossiysk Commercial Seaport Group (NSCP), one of many Russian entities involved in shipping, that will be sanctioned.As a result, sanctions have made ships less willing to approach Russian ports.
However, semi-finished slabs and billets are not covered by the sanctions as they are not subject to safeguards.
A source told MetalMiner Europe that there is not enough iron ore raw material.Ukraine is a major supplier of raw materials to Europe, and deliveries were disrupted.
Semi-finished products will also allow steelmakers to roll finished products if they cannot produce further steel, the sources said.
In addition to mills in Romania and Poland, US Steel Košice in Slovakia is particularly vulnerable to disruptions in iron ore shipments from Ukraine because of their proximity to Ukraine, the sources said.
Poland and Slovakia also have railway lines, built in the 1970s and 1960s respectively, to transport ore from the former Soviet Union.
Some Italian mills, including Marcegaglia, import slabs for rolling into flat products.However, the source noted that most of the material previously came from Ukrainian steel mills.
As sanctions, supply disruptions and rising costs continue to impact metals sourcing organizations, they must revisit best sourcing practices.
Ukrmetalurgprom, the Ukrainian metals and mining association, also called on Worldsteel on March 13 to exclude all Russian members.The association accused the steelmakers there of financing the war.
A spokesman for the Brussels-based agency told MetalMiner that under the company’s charter, the request must go to Worldsteel’s five-person executive committee and then to all members for approval.The broader board, which includes representatives from each steel company, has about 160 members.
The European Commission said Russia’s steel imports into the EU in 2021 will total 7.4 billion euros ($8.1 billion).This accounted for 7.4% of total imports of nearly 160 billion euros ($175 billion).
According to information from MCI, Russia cast and rolled an estimated 76.7 million tonnes of steel products in 2021.This is a 3.5% increase from 74.1 million tonnes in 2020.
In 2021, about 32.5 million tons will enter the export market.Among them, the European market will lead the list with 9.66 million metric tons in 2021.MCI data also shows that this accounts for 30% of total exports.
The source said the volume was up 58.6% year-on-year from about 6.1 million tonnes.
Russia began its invasion of Ukraine on February 24.President Vladimir Putin described it as a “special military operation” aimed at stopping the genocide of ethnic Russians, denazification and demilitarization of the country.
Mariupol, one of the main ports for the export of Ukrainian steel products, was heavily bombed by Russian troops.There were reports of high casualties there.
Russian troops also occupied the city of Kherson.There have also been reports of heavy shelling of Mykolaiv, each port located in western Ukraine, near the Black Sea.
Post time: Jul-13-2022