Sourced fact
The News
Yuriy Ryzhenkov, CEO of Metinvest, one of Ukraine's largest steel companies, has called on the European Union to lift restrictions on Ukrainian steel imports. Ryzhenkov stated that these restrictions are "unfair" as they do not take into account the specific circumstances Ukraine is facing due to the war with Russia. He expressed hope that exceptions would be made to allow Ukraine access to the European market.
The European Commission spokesperson confirmed that the EU recently imposed restrictions on steel imports to protect member states' steel manufacturers from competition from cheaper imports from countries such as China and Turkey. According to this policy, the EU set an annual duty-free quota for steel imports at 18.3 million tons, 47% lower than the 2024 level. Although the EU has a free trade agreement with Ukraine, this agreement does not prevent the EU from implementing separate trade protection measures. The EU acknowledges that Ukraine's steel import quotas are lower than in previous years but says this ensures Ukrainian steel exports. The EU also stated that it has provided compensation to its largest suppliers, including Ukraine.
Ryzhenkov noted that the Ukrainian steel industry could see a 50-60% drop in exports to the EU due to these restrictions. He mentioned that the steel industry is a cornerstone of Ukraine's economy, contributing about 10% of Ukraine's gross national income and a third of its exports before Russia's invasion in 2022. However, the industry has been severely impacted by the ongoing Russian shelling.
Ryzhenkov confirmed that all of Ukraine's steel mills have been shelled at various points since the start of the conflict in 2022, with an increase in strikes recently. He mentioned that there was a point in September when no ton of steel was produced in Ukraine for the first time in about 150 years. Additionally, he noted that around 800 workers from Metinvest have been killed since the start of the war.
Ryzhenkov stated that despite improvements in the areas covered in their factories where workers can seek refuge during air raids, this does not prevent full damage to the factories. He added that he expects the coming winter to be "one of the toughest winters in our history," pointing to the difficulty of accessing other markets besides the EU due to logistical shipping restrictions.
Analysis & context
Analysis & Context
Analytically, the steel industry is a cornerstone of Ukraine's economy. Prior to Russia's invasion in 2022, the steel industry accounted for approximately 10% of Ukraine's gross national income and a third of its exports. However, this industry has been severely impacted by the continuous Russian shelling, leading to a temporary halt in steel production in Ukraine in September 2023.
In a broader context, Ukraine faces significant challenges in accessing global markets due to trade restrictions imposed by other countries. These restrictions add pressure on Ukraine's economy, which heavily relies on steel exports.
It is worth noting that the EU faces increasing pressure from steel industries in member states to protect these industries from external competition. However, these restrictions significantly impact countries that depend on steel exports, such as Ukraine, thereby increasing trade tensions between the two.
