Sanctions against the Russian mining and metallurgical industry: Will Ukraine benefit?

As a result of European sanctions on the Mining and Metallurgical Industry (MMI), Russia’s export of metallurgical raw materials, semi-finished products, rolled steel, and pipes to the EU decreased by 68%, to €3B, compared to the pre-war year of 2021.

This may create opportunities for Ukraine to increase its supply of MMI products to the EU market. As a result of adopting the 12th package of sanctions, there were opportunities to increase the export of iron and ferroalloys. Ukraine can additionally supply up to 1.5 million tons of pig iron and up to 7-8 million tons of iron ore coils to the EU market.

However, it will be difficult for Ukrainian suppliers to replace Russian products due to their lower prices. Still, a gradual takeover of Russian market share by Ukrainian producers is possible starting next year.

However, the inconsistency of sanctions and quotas during a long transition period dearly cost both the EU and Ukraine. The EU created an imbalance in the internal EU steel market, depriving Ukraine of the opportunity to increase its export volumes.