• Українською
  • Ukraine has the potential to export up to 1.5 million tonnes of pig iron and iron ore to the EU market instead of replacing russian supplies, says Oleksiy Sobolev
    Ministry of Economy of Ukraine, posted 16 November 2023 15:02

    Ukraine has the capability to export substitute russian supplies of pig iron and iron ore to the European market. This is detailed in the study "Overview of Sanctions Restrictions on Russian Pig Iron and Ferrous Ores" prepared by the Reform Support Team of the Ministry of Economy (RST ME) with the participation of the Ministry's Sanctions Policy Department, Kyiv School of Economics and GMK Center as part of the Export Booster project.

    russia is one of the world's largest exporters of pig iron and iron ore. It ranks second in the world in terms of pig iron exports and ninth in terms of iron ore exports. Despite this, the European Union has refrained from imposing sanctions on imports of these categories. This issue was on the agenda of the ninth, sixth, fifth and fourth EU sanctions packages.

    The imposition of sanctions on imports of pig iron and iron ore in the European Union could both provide additional opportunities for Ukrainian producers and bring even more instability to the russian economy.

    "Ukraine is a potential supplier of iron ore and pig iron to the European market. As of September 2023, five blast furnaces with a total capacity of about 6-7 million tonnes were idle in Ukraine. They are currently operating at reduced capacity, by about 50%. According to data for January-July 2023, Ukraine could increase pig iron exports to around 1.5 million tonnes this year. The activation of capacities depends on overcoming logistical constraints and ensuring a stable supply of electricity and water," says Oleksiy Sobolev, Deputy Minister of Economy of Ukraine.

    Customs tariffs on iron ore and pig iron have already been introduced in the US and the UK. The United Kingdom imposed a 35% duty, which led to a decrease in imports of russian pig iron and iron ore by USD 51.8 million in 2022 compared to 2021. The United States also introduced a number of additional duties, and in 2023 stopped importing pig iron from russia altogether. Despite being one of the largest importers of pig iron in the world, the United States has successfully suspended trade with russia.

    "Ukraine is emerging as the most viable alternative to russian pig iron and iron ore on the global market. The imposition of sanctions on this category in the EU will deprive russia of additional export revenue of USD 1 billion, further weakening the ruble and depriving it of additional tax resources to support the war. This could have important consequences for the russian economy and the geopolitical situation," emphasises Denys Shemyakin, Director of the Reform Support Team at the Ministry of Economy of Ukraine.

    The full version of the study is available in the attached files.

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