The European Union and its G7 partners plan to ban the import of key goods in the iron and steel sectors from Russia as part of a fourth wave of sanctions to further isolate Russia and drain the resources used to finance its war in Ukraine, European Commission President Ursula von der Leyen said in a statement March 11.
아직 가입하지 않으셨나요?
일일 이메일 알림과 구독자 노트를 받고 이용 경험을 내게 맞게 설정하세요.지금 가입하세요
"This will hit a central sector of Russia's system, deprive it of billions of export revenues and ensure that our citizens are not subsidizing Putin's war," von der Leyen said, referring to Russian President Vladimir Putin.
The EC did not provide a definition of what the key goods would include and had not yet responded to S&P Global Commodity Insights' request for additional information by time of publication.
A separate statement by G7 leaders did not mention the banning of metal imports specifically but said they were "ready to impose further restrictions on exports and imports of key goods and technologies" aimed at denying Russia revenues.
According to the European Steel Association, or Eurofer, the EU imported 3.2 million mt of steel finished products from Russia in 2020 and an estimated 3.7 million mt in 2021. Russia was the second-largest supplier after Turkey.
Severstal shipments already halted
Russian mining and steel company Severstal ceased shipments to the EU in early March because of the sanctions the bloc imposed on its majority shareholder and the chairman of the board, Alexey Mordashov, as a consequence of Russia's invasion of Ukraine.
Severstal sold 3 million mt of steel to Europe in 2021, representing 57% of the company's 5.3 million mt overall exports and 27% of its total steel sales of 11.1 million mt.
Meanwhile, Russian steelmaker MMK said on its website that a significant part of its rolled steel supplied the domestic market, creating an additional margin of safety for the company.
At this point, it is not clear whether the EU will spread the ban on exports to European mills owned by or affiliated with Russian companies.
Mining and steel company NLMK, which aside from Russia and the US, owns a plate mill in Denmark and its joint venture NLMK Belgium Holdings, which shipped 1.7 million mt in 2021, is made up of plate producers Clabecq (Belgium) and Verona (Italy), and strip producers La Louviere (Belgium) and Strasbourg (France).
In 2021, NLMK supplied Dansteel and NBH mills 2.1 million mt of slab it produced in Russia, at Novolipetsk Iron and Steel Works.
Unclear whether HBI affected
It was also not clear whether the ban would include hot briquetted iron.
At the end of 2021, one of the world's leading HBI producers, Russia's Metalloinvest, said most of the largest electric arc furnace-based European steel producers, including Arvedi, Ferriere Nord, Riva and Celsa, were buying its HBI.
It also said it was eager to become a partner for green metallurgy in Germany, where it expected to see a widespread transition to EAFs over the next 10 years.
In 2021, Metalloinvest's sales of iron products – concentrate, sintering ore, pellets and HBI/DRI – to Europe grew 32% year on year to account for 37% of the company's overall 27.7 million mt of iron ore shipments to third parties.
Russia also exported around 570,000 mt of pig iron to the EU in 2021, representing around 15% of the total Russian pig iron exports.
Proposed ban on EU investments in Russian energy sector
Other measures will include proposing a "big ban" on new European investments across Russia's energy sector and banning the export of any EU luxury goods to Russia.
Russia will also lose its status of most-favored nation in G7 markets, revoking its benefits enjoyed as a World Trade Organization member.
The sanctions will ensure that the Russian state and its elites cannot use crypto assets to circumvent the sanctions, while a task force would also be set up "targeting Putin's cronies," von der Leyen said.
The full measures will take effect March 12.