EU Steel Import Quotas Threaten Ukraine's Industry, Warns Metinvest CEO

The EU's Steel Import Quotas: A Threat to Ukraine's Industry

New EU limits on steel imports could destroy Ukraine's industry and deal a big blow to the country's budget as it defends itself against Russia, according to the head of its biggest steelmaker.

Impact on Ukraine's Steel Industry

Yuriy Ryzhenkov, the chief executive of Metinvest, said the new EU quota system due on 1 July could “kill the Ukrainian steel industry”. The EU has introduced the protectionist measures in the face of a long-running global glut of steel caused by China.

Financial Implications

The EU halved the quotas of steel that can enter the bloc tariff-free, while also doubling the tariff to a prohibitive 50% on all imports above each country's allocation. For Ukraine, the economic threat from its military ally is exacerbated by the war, which has cut off some of its previous alternative markets and pushed the country's steelmakers to integrate more closely with Europe.

Consequences for Ukraine's Economy and War Effort

Ukrainian steelmakers argue that the quotas would also damage the war effort by depriving the government of tax revenues equivalent to hundreds of millions of pounds. Metinvest, owned by the billionaire Rinat Akhmetov, is thought to be the largest private sector taxpayer in the country.

Future Outlook

Ryzkenhov said it was not possible for Metinvest to invest the billions of euros it would cost to upgrade its two plants to cleaner electric arc furnaces because of the war – although it had planned to do so before Russia's full-scale invasion. The quotas would come on top of levies added to imports to the EU, known as the carbon border adjustment mechanism, to penalise steel produced with dirtier blast furnace technology.