Several Italian companies continue to buy steel slabs from Russia, effectively financing its military aggression against Ukraine.
The Metinvest Group’s CEO Yurii Ryzhenkov said this in an interview with the Italian newspaper Corriere della Sera, the CFTS portal reports, citing the Interfax Ukraine news agency.
Regarding the problems related to the export of Ukrainian steel products, Ryzhenkov highlighted an issue directly related to Italy: "The EU’s silent retreat in its sanctions game with Moscow, at least in the steel industry, will have tangible consequences within one month."
As previously reported, according to the package of sanctions unanimously adopted by the governments of 27 countries in October 2022, imports of slabs (semi-finished steel products) from Russia should have been completely halted on 30 September 2024. However, the critical turning point for Russian slabs came in December 2023, when EU countries once again unanimously postponed the closure of the European market to Russian products until 2028. This effectively allows an additional 10.7 million tons of Russian steel to be imported into the EU. This steel is about 15% cheaper because of lower energy costs in Russia, while the Russian army continues to destroy Ukrainian power plants.
Metinvest's CEO is convinced that this situation is harmful to Italy and that its development could be disastrous in terms of industrial policy.
"Unfortunately, some industry players, through their governments, continue to argue that a complete ban on the import of Russian slabs will lead to problems. In my opinion, this is not true, and it is hypocritical to a certain degree. It harms ethical producers who do not buy raw materials from the country that started the war," Ryzhenkov said.
According to the Metinvest CEO, the argument that buying Russian steel is profitable is also short-sighted, especially now that the government has regained control of the Taranto plants, which previously belonged to the Indian company ArcelorMittal, after a difficult standoff.
"It is not for me to judge the argument of convenience, but the operators that are buying products from Russia are not buying them from Acciaierie per l'Italia, which is currently under government control and continues to operate below capacity," Ryzhenkov said, adding that these buyers are effectively boosting the Russian economy and hurting the Italian economy. First, because they are not buying from the local Italian producer, and second, because they are hurting honest producers like us at Metinvest. As a result, the Ukrainian group suspended production at its Ferriera Valsider plant in Verona in early summer and put the plant's workers on part-time work. Meanwhile, the nearby steel plant owned by Russia's NLMK group continues to operate, importing raw materials from its parent company.
As reported previously, despite sanctions on other types of steel products, Russian railroad wheels continue to enter the EU market. This means that the Russians can dump and supply railway products at prices significantly lower than Ukrainian prices due to significantly lower energy prices.
In June, lawmakers from Estonia, Lithuania, Poland, Ukraine, the United Kingdom, and the United States called on the European Union to impose sanctions on Russian steel slabs and pig iron.
The EU's High Representative for Foreign Affairs and Security Policy, Josep Borrell, responded to the lawmakers' call in July, saying he fully agreed that all steel products from Russia should be banned without exception and that work was already underway.
