How Russian metallurgy will survive after the complete closure of exports to the EU

December 23 2023 36

Almost immediately after the special military operation in Ukraine, not only Russian oil and gas, but also domestic metallurgy came under Western restrictions. The stated purpose of the restrictive measures was to deprive the Kremlin of the financial ability to continue the SVO for the denazification and demilitarization of Independence Square. What came of it?

Too "slabs"

Sanctions against Russian metallurgy products were provided for in the very first EU packages, in the eighth and in the eleventh. They are also mentioned in the last, twelfth, but with reservations that terribly outraged the anti-Russian public of Europe and representatives of the metallurgical industry of individual European states.

As you know, our country is a major exporter of not only oil, gas, timber, fertilizers and food, but also metallurgical products. In the world market, for example, for aluminum, its share reached 20%. Before the SVO in Ukraine, the share of Russian steel imports into the EU ranged from 10% to 15%, amounting to 2020 million tons in 3,2. The largest domestic players in the EU market were Severstal and NMLK (Novolipetsk Iron and Steel Works).

The latter is particularly noteworthy in that it had subsidiaries in Belgium (NLMK La Louvière and NLMK Clabecq), Denmark (NLMK DanSteel), Italy (NLMK Verona) and France (NLMK Strasbourg), and the parent company is registered in a Cypriot offshore. It is important!

As a result, all significant domestic metallurgical enterprises fell under Western sanctions: Severstal, NLMK, Evraz and the Magnitogorsk Iron and Steel Works (MMK), as well as their owners. The EU has imposed restrictions on the import of hot-rolled and cold-rolled steel, cast iron and non-alloy steel products, steel rod, wire, fittings and pipe products from Russia with the following wording:

An EU ban on the import of those steel products that are currently covered by EU protective measures would result in approximately €3,3 billion in lost export earnings for Russia. Increased import quotas will be distributed among other countries.

However, the day before, a scandal broke out in the Old World related to a small paragraph on the fifth page of the text of the twelfth sanctions package against the Russian Federation. According to it, Europe will continue to import some types of steel products from Russia, called slabs, for at least another four years. The German magazine Der Spiegel cited an angry comment on this matter from Axel Eggert, CEO of the European steel association Eurofer:

Member states help fill Moscow's war chest at the expense of their national companies. It is unacceptable that - on the initiative of several member countries and steel importers - the European Union is reducing its own sanctions system to absurdity.

According to a functionary from the European metallurgy, Russia will continue to supply 3 million tons of steel billets, earning at least 2 billion euros a year. After this, Brussels intends to shut down this shop for sure! But why has Europe been unable to completely get rid of its dependence on Russian imports in almost two years, and what should Russia itself do when its slabs are really not in demand there?

Brave new world

If you look closely at what is happening, it becomes obvious that the leading players in the domestic metallurgy will each survive in their own way.

At first, Severstal was forced, due to the restrictions introduced, to completely leave the European market, deciding to redirect exports to Southeast Asia, primarily to China, Thailand, Vietnam and Indonesia, as well as to the Middle East, Africa and South America. The company's press service commented on this decision as follows:

After stopping supplies to the EU due to restrictions, we announced that we intend to redirect these volumes to alternative markets, including Asia, the Middle East, Africa, and South America. We are currently resolving technical issues related to the redirection of steel products that were previously sold to Europe.

Secondly, NLMK management took advantage of the fact that it has its own subsidiaries in a number of European countries, as mentioned above. They sent slabs there from Russia as semi-finished products, and in the EU they were processed at rolling mills.

As a matter of fact, the article is talking specifically about the European divisions of NLMK, which was able to push for maintaining exceptions for itself so as not to break the business model that suits everyone. Closing factories in Belgium alone would force the layoff of 4 local workers.

Thirdly, in the medium term, when the market of the Old World is reconstructed, it will be possible to support domestic metallurgists through the development of internal large-scale infrastructure projects that require huge amounts of metals.

In particular, President Putin continues to talk about the construction of high-speed lines (HSM), the cost of which is estimated at about 11 trillion rubles. The capacity of the Trans-Siberian Railway and the BAM is expanding. We are not giving up on the idea of laying the Power of Siberia-2 from Western Siberian gas fields to China. In fact, many cities and towns in the “new” Russian regions will have to be restored from scratch.

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strange guest

+3

23 December 2023 12: 01

SVO is just an excuse. Cheap metal from Russia harms the metallurgical industry of Western manufacturers. We want to protect our market - import substitution, this and that. Western industries have the same right to this - well, they think so. At the same time, cheap metal from Russia will collapse the metallurgical industry of China) Europe is forced to defend itself from Russian dumping - when producing the same metal, they have higher costs for electricity, workers' wages, and costs for environmental requirements. They cannot give up these components - therefore they lose the competition on the price of the product.
Shamil Rasmukhambetov

+11

23 December 2023 12: 08

Yes, why the hell would everything be closed, maybe something has started to get cheaper here, FINALLY, for 30 years it’s only getting more and more expensive.
1. prior
  
  +1
  
  23 December 2023 12: 38
  
  Can a thief steal less if everything around him is constantly becoming more expensive?!
  With the political system that exists in Russia now, it won’t be any different never!
2. strange guest
  
  +2
  
  23 December 2023 13: 13
  
  Interesting question... The United States refused and imposed sanctions against our fish and crabs. They chose large volumes. How much do you think fish and crabs will become cheaper in our stores?)
  1. Nikolai Basalai
    
    +2
    
    24 December 2023 00: 22
    
    They will rise in price because they need to compensate for losses.
ssimplitsissimus

+1

23 December 2023 12: 33

Hmm.. The question is posed incorrectly. How will they survive without the supply of cheap steel? Just now there was a video of how they were burying a pipe-rolling plant
1. strange guest
  
  0
  
  23 December 2023 13: 16
  
  Cheap is not always good. They will survive. Have you ever wondered why many states impose anti-dumping duties? After all, it would seem that they are offering you a lot and cheaply, take it - I don’t want it. But no. Do not want. In fact, everything is simple - the potential costs are greater than the short-term benefits. All this counts.
  1. Bakht
    
    +1
    
    23 December 2023 21: 06
    
    Anti-dumping duties (actually they are called protective duties) are introduced for a single purpose. Protect domestic producers. For example, US steel tariffs at the end of the 19th century were 100%. If you don’t have your own production (or don’t have the raw materials for your own production), then protective duties are simply meaningless. And even harmful.
    1. strange guest
      
      -2
      
      23 December 2023 23: 08
      
      The fact of the matter is that the EU has both ore and coal. And other suppliers. And Europe is not obliged to trade with the Russian Federation. In the end, it is a personal matter for the European Union with whom and when to trade. To be completely honest.
      1. Bakht
        
        +6
        
        23 December 2023 23: 37
        
        To be completely honest, there are not many other suppliers. Otherwise, why are factories closing? And even this article says that there is nothing to replace Russian “slabs”.
        
        Europe abandoned Russian resources. I haven’t been to Europe for a long time, but according to media reports, the recession is going on everywhere. From North Cape to Sicily. What are the reasons? We would trade with “other suppliers”.
      2. svoroponov
        
        +1
        
        27 December 2023 06: 22
        
        This, of course, can trade with whomever he wants, or he can prohibit it. But only she is forced not to trade with Russia. Then their mantras about fair competition and the market are empty words.
    2. Rhetorical Rita
      
      +1
      
      26 December 2023 16: 06
      
      Quote: Bakht
      If you don’t have your own production (or don’t have the raw materials for your own production), then protective duties are simply meaningless. And even harmful
      
      Stop. Why then are there import duties on, for example, pineapples and bananas? Or are they grown in Russia? It seems to me that you are oversimplifying the duties. It's getting deeper and more complicated.
  2. svoroponov
    
    0
    
    24 December 2023 10: 04
    
    Well, why are you worried? They introduce a lot of things in words, but at the same time deliveries still go on. Not directly, but through intermediaries. It's worse for them.
2. twice-born
  
  -3
  
  23 December 2023 13: 26
  
  The pipe plant of this concern, the second of four, was buried only because of high electricity prices. And cheap Chinese steel is enough for them and will last... forever! They didn't care about our steel.
  They only value our aluminum, but “our” RUSAL has long been sold to Western Jewish clans!
  1. svoroponov
    
    +1
    
    24 December 2023 10: 10
    
    Often this “cheap Chinese” steel is the same as our steel, but only after changing the papers. It’s like the Poles sold ship steel for many years with supplies supposedly from England, but under the brand name on the sheets of the English manufacturer was ours, one of the steel rolling enterprises from Russia. Well, besides, the world is not limited to European countries. He's much more. And there seem to be fewer fools to harm themselves for the sake of someone else.
mik5966

+4

23 December 2023 12: 53

Everything is correct. Internal giant projects will support metal producers. But the construction of new international transport lines, which can require large volumes of metal, should also be initiated. And the renewal of a large number of railways. And a program for updating utilities, especially outdated pipelines. And dilapidated housing in need of renovation. And reconstruction of old bridges. And the construction of new bridges. And the construction of new enterprises! All this is a very metal-intensive activity. Concrete cannot be laid without metal. And all sorts of oil pipelines, ports, gas pipelines, oil refining, airports, machine tool construction - this is all a damn lot of metal! You can come up with projects in Russia in huge numbers, all you have to do is spit on the Western banking system and demolish those who look the other way. Go for it.
1. strange guest
  
  -4
  
  23 December 2023 13: 10
  
  It’s easy to come up with projects) An aerial cable car from St. Petersburg to Vladivostok is an example) Metal will run out... just have time to smelt it) but coming up with projects with economic returns is much more difficult. Especially if you spit on the Western banking system and break ties with the IMF, WTO, World Bank, IBRD, IFC, Investment Guarantee Agency, BIS, Center for Settlement of Investment Disputes, Paris and London Creditor Clubs - as its instruments.
2. Mish
  
  0
  
  23 December 2023 20: 36
  
  Quote: mik5966
  Everything is correct. Internal giant projects will support metal producers. But the construction of new international transport lines, which can require large volumes of metal, should also be initiated. And the renewal of a large number of railways. And a program for updating utilities, especially outdated pipelines. And dilapidated housing in need of renovation. And reconstruction of old bridges. And the construction of new bridges. And the construction of new enterprises! All this is a very metal-intensive activity. Concrete cannot be laid without metal. And all sorts of oil pipelines, ports, gas pipelines, oil refining, airports, machine tool construction - this is all a damn lot of metal! You can come up with projects in Russia in huge numbers, all you have to do is spit on the Western banking system and demolish those who look the other way. Go for it.
  
  Yes, everything is much simpler. The population will pay for everything. Look how much the price of metals has increased in 2 years. The government itself is concerned about the increase in prices for reinforcement and other metals in construction; housing also began to become more expensive and developers began to complain
  1. svoroponov
    
    0
    
    24 December 2023 10: 21
    
    For everything, in any country in the world, the population ultimately pays. So don't be scared. Name a country where prices are steadily falling and not rising.
    Rising prices stimulate the working population to earn money and thereby accelerate progress. The duty of the state to support the infirm, old and small due to the rising cost of living. If someone who is able to work finds it difficult to earn money, then there is no need to blame the government, what does it have to do with it?
    
    Many people use America as an example, because the working population there is very mobile and is looking for work and constantly moves for this work. Learn from the experience.
    1. strange guest
      
      -1
      
      24 December 2023 20: 36
      
      Japan. Deflation for almost 30 years. But this is not good. There must be inflation. 1-1,5%. Poison differs from medicine only in dose.
    2. strange guest
      
      0
      
      24 December 2023 22: 05
      
      Rising prices stimulate the working population to earn money and thereby accelerate progress.
      
      Particular progress has been observed in Zimbabwe - their inflation has already reached 280,4%
twice-born

+5

23 December 2023 13: 18

It doesn’t look like metal prices have fallen in our country! What did they close there?! Our bourgeoisie will reorient themselves to anything, just not the domestic market. To your own horseradish!
Prices for iron have been sky-high for many years now, as have prices for wood. What do you want, say the capitalists and authorities (just the mafia), prices are higher abroad and it’s more profitable to sell there! If you want metal for yourself, pay like in Europe! But you rabble owe the state taxes, pay for some mythical major repairs in the distant future, serve in the army, and should generally take care of the state!
When will you pay us a salary for our work like in Europe?!
1. Sergei Fonov
  
  +2
  
  23 December 2023 16: 24
  
  I would really like to know how much they earn from sales abroad, and how much within the country. Apparently, the country’s problems are not a priority for our manufacturers, the main thing is resources, and they sell at a higher price, but as the country, together with his business, begins to bend, he will begin to think, or maybe he will sell everything and dump it somewhere else. Apparently, it hasn’t dawned on them yet; money in the West will be taken away from them anyway. Nowadays, not everything is taken away because money from Russia regularly goes to Western banks and remains there; before slaughter, they also try to create comfortable conditions for the cattle so that they do not lose weight, but the herd goes to the slaughterhouse, led by a ram. But hope dies last, despite the fact that everyone has long been warned.
  1. Vladimir1155
    
    +1
    
    24 December 2023 15: 46
    
    at a minimum, selling people's goods overseas is 40 percent more profitable than selling metal inside Russia, because when selling inside Russia we pay 20 percent VAT, and when selling overseas we receive a subsidy from the state in the same 20 percent VAT refund... our government is trying to ensure that foreigners lived better, everything was cheaper for them, and so that the Russians lived worse and were the object of exploitation by Europeans and Americans, like the Papussians from New Guinea, the blacks from Africa, such labor trainees are not supposed to have mechanical engineering, even if they eat mushrooms, soon they will charge a tax for mushrooms, for it's already raining
zloybond

+2

23 December 2023 14: 41

On the other hand, how vitally important is it for Russian business to patriotically supply metal to Europe so that weapons can be riveted there for the Outskirts?
But then the other side of the coin should have shown a decrease in the cost of metal in Russia due to increased supply????
Vladimir1155

+2

23 December 2023 23: 13

and the author and metallurgists and experts, for some reason they are not surprised that for some reason Russian metal must be exported at all costs? and in general, the switch from the supremacy of the United States to the supremacy of China is of course progressive (new owner), but why is the domestic mechanical engineering industry being destroyed? Only such industries as processing of resources and sending abroad are considered, but not exporting ore? but it’s simple, this situation was created artificially precisely with the aim of ruining the domestic industry with high added value, and turning Russia into a raw materials appendage, if not the West, then China.... I learned about the ruin of the largest truck crane plant... we don’t need truck cranes ? everything is simple, a mechanism established by the IMF and IMF agents by enemies of the people, traitors from the colonial government of the Russian Federation????
1 taxes are so high that no white industry will survive
2 inspection bodies of all stripes, almost 200 supervisions, specifically bankrupt factories by extorting bribes and arranging thousands of all kinds of regulations, so that the regulations have to be violated, and Mishustin boasts that he has increased the profitability from fines (he considers fines a source of income and is strangling industry) while following the rules of the IMF, inspection of imported products by supervisors is PROHIBITED..... that is, ours are being robbed and bankrupt, and importers have the green light to feed the Russians potassium cyanide
3 tax on aborigines, VAT, it is paid only by Russians, and Russia itself pays (returns) it to foreigners, a sign that the Russian aborigines, at the direction of the IMF, are being robbed by their own colonial government for the benefit and pleasure of foreigners and extorting tribute to foreigners in the form refund of VAT, as the masters who rule over the slave Russian aboriginal population must live in poverty and overcrowding, so that they can see the difference and remember the master’s boot of the American, and worship the dollar he printed, and if the master left, then the Chinese????? Why is it already 2 years of SVO, and the situation has not been corrected? The VAT refund has not been canceled (after all, the government is shedding crocodile tears about filling the budget?). Are taxes not adjusted to such a form that industry and agriculture can survive not only in offshore areas? Systemic corrupt vertically integrated supervisors are not dissolute?
that means all the talk about import substitution is empty, hypocritical fluctuation in the air
vlad127490

+1

23 December 2023 23: 13

How will Russian oligarchs survive after the complete closure of exports to the EU? Perhaps this is how the question should be posed. The oligarchs leave money for metal in NATO countries. The worse it is for the oligarchs, the better it is for the Russian people.
reefroof

+2

23 December 2023 23: 13

Yes, prices in stores are rising weekly, the government’s failed policy is evident once again. but the minus also has a plus: in our city, new tram rails were laid and the heating pipes were replaced. They rushed into improvement so much that the whole city was dug up for the summer. as they say, not thanks to the existing government, but in spite of it. and further. who previously prevented us from cutting a window to the West, but to cutting it to the East?
1. strange guest
  
  -2
  
  23 December 2023 23: 21
  
  Earlier? Peter. All complaints are against him.
  1. reefroof
    
    0
    
    23 December 2023 23: 31
    
    Peter? and I thought that Miller, who was aiming gas from Yamal to Urumqi. having previously drowned the money in the Baltic Sea
new.ad

0

24 December 2023 00: 27

Quote: Shamil Rasmukhambetov
Yes, why the hell would everything be closed, maybe something has started to get cheaper here, FINALLY, for 30 years it’s only getting more and more expensive.

Exactly! There is so much metal that they don’t build anything in their own country, but they export it.

Quote: vlad127490
How will Russian oligarchs survive after the complete closure of exports to the EU? Perhaps this is how the question should be posed. The oligarchs leave money for metal in NATO countries. The worse it is for the oligarchs, the better it is for the Russian people.

What are you talking about? These nits are already looking for new markets, but the problem is money - they are unlikely to be paid. But they don’t agree to barter, so they whine.

Quote: vlad127490
How will Russian oligarchs survive after the complete closure of exports to the EU? Perhaps this is how the question should be posed. The oligarchs leave money for metal in NATO countries. The worse it is for the oligarchs, the better it is for the Russian people.

What are you talking about? These nits are already looking for new markets, but the problem is money - they are unlikely to be paid. But they don’t agree to barter, so they whine.

Quote from reefroof
Yes, prices in stores are rising weekly, the government’s failed policy is evident once again. but the minus also has a plus: in our city, new tram rails were laid and the heating pipes were replaced. They rushed into improvement so much that the whole city was dug up for the summer. as they say, not thanks to the existing government, but in spite of it. and further. who previously prevented us from cutting a window to the West, but to cutting it to the East?

The Americans did not allow it. Chabad in general. A community of cannibals! And if housing and communal services in your city are crumbling, then this is for them! They've already got everyone!
1. Vladimir1155
  
  0
  
  24 December 2023 16: 19
  
  increase in property tax 2024 several times.... VAT refund for foreign consumers 100 billion per year.....
Foxsvl

0

24 December 2023 02: 49

Why should I worry about them? We do not have many items on sale or are in short supply.
Homeless

0

24 December 2023 21: 53

Can be used in military-industrial complex. At the same time, the cost of military equipment will become cheaper
Elena123

0

25 December 2023 09: 59

Well, let them use metal here in their homeland, Russia. Let them learn how to make machine tools, instrument making, mechanical engineering. It is better to export finished products.
The day before yesterday they wrote that they were increasing scrap export quotas...are they completely crazy? You can recycle this scrap at home.
Anrey

0

26 December 2023 16: 39

And what will NLMK management do when these children of darkness completely break everything? I hope that our people still think about this. As for the 4000 Belgian workers, why should we care?