The Ministry of Economy of Ukraine believes that nothing prevents the European Union from introducing sanctions against cast iron and iron ore from Russia. This will deal an additional blow to the Russian economy and support Ukraine, the ministry said in a statement citing research by the Ministry of Economy's Reform Support Team.
In 2022, EU countries imported 1.17 million tons of cast iron from Russia worth $659 million and 2.81 million tons of iron ore worth $457 million. This is 33% and 22% of Russian exports of these commodity groups, respectively.
The main market for Russian pig iron in the European Union is Italy, and for iron ore, the Netherlands.
The Ministry's team believes that there is enough capacity in Ukraine and the world to replace these supplies.
Alternatives to Russian cast iron are Ukraine and Brazil, and Ukraine can replace Russian iron ore on its own.
"As of September 2023, five blast furnaces with a total capacity of about 6-7 million tons are idle in Ukraine. Now they are operating at reduced capacities, by about 50%. According to data for January-July 2023, this year Ukraine can increase exports pig iron up to approximately 1.5 million tons. The activation of capacities depends on overcoming material and technical limitations and ensuring a stable supply of electricity and water," said Deputy Minister of Economy Oleksiy Soboliev.
Customs tariffs on iron ore and pig iron from Russia have already been introduced in the United States and United Kingdom.
Britain imposed a 35% tariff, resulting in a $51.8 million decrease in Russian pig iron and iron ore imports in 2022 compared to 2021. The United States also introduced a number of additional tariffs, and in 2023 completely gave up imports of pig iron from Russia.
The introduction of sanctions against these product groups will make it possible to deprive Russia of additional income from exports in the amount of $1 billion without harming the European Union itself, which will create additional pressure on the ruble exchange rate and deprive the Russian Federation of part of its resources for the war against Ukraine.
The European Union has so far refrained from imposing sanctions on the import of iron ore and iron ore, although this issue was on the agenda in the ninth, sixth, fifth and fourth EU sanctions packages.
Now the 12th package of sanctions is being discussed, and there is no import embargo on these product categories.