New European Union limits on steel imports could destroy Ukraine's steel industry and severely impact the country's budget as it defends itself against Russia, according to the head of its largest steelmaker.
Metinvest CEO warns of 'unfair approach'
Yuriy Ryzhenkov, chief executive of Metinvest, stated that the EU quota system set to take effect on 1 July could 'kill the Ukrainian steel industry.' The EU has introduced protectionist measures in response to a global steel glut driven by China, halving the amount of steel that can enter the bloc tariff-free and doubling the tariff to 50% on imports exceeding each country's allocation.
Ryzhenkov argued that Ukraine does not pose a significant threat to the EU steel industry and that killing off one of the country's functioning industries is unwise. He noted that Ukraine has not received any leniency despite its wartime situation.
Impact on Ukraine's war effort
Ukrainian steelmakers say the quotas will deprive the government of tax revenues worth hundreds of millions of pounds, damaging the war effort. Metinvest, owned by billionaire Rinat Akhmetov, is considered the largest private sector taxpayer in Ukraine.
The quotas add to existing EU carbon border adjustment mechanism levies, which penalize steel produced with dirtier blast furnace technology. Ryzhenkov explained that Metinvest cannot invest billions of euros to upgrade its plants to cleaner electric arc furnaces due to the war, although such plans existed before Russia's full-scale invasion.
Operational challenges amid war
Metinvest's two steel plants near Zaporizhzhia and Kamianske are operating at about 75% and 66% capacity, respectively. The company faces regular damage to railways used for transporting products and inconsistent electricity supply due to Russian attacks on Ukraine's power grid. It has installed its own generators to restart operations more quickly after blackouts.
Metinvest has lost several key assets due to the fighting. The Mariupol steelworks was destroyed early in the war after a brutal battle, and the company has been without its Pokrovsk coking coalmine for a year as the area became a battleground.
The EU's decision has prompted a scramble among trade partners, including the UK, to secure sufficient quota shares. The UK steel industry has warned of an 'existential threat' if it does not maintain adequate access to its largest export market.
